Annual Report | 2019
Sally Textile Mills Limited
Mission Statement
The Mission of Sally Tex�le Mills Limited is to be the finest organiza�on, and to conduct business responsibly
and in a straight forward way.
Our hallmark is honesty, innova�on, teamwork of our peopleand our ability to respond effec�vely to change in all aspects
of life including technology, culture and environment.
Our basic aim is to benefit the customers, employeesand shareholders and to fulfill our commitments to the society.
We will create a work environment, which mo�vates, recognizes and rewards achievements at all levels of the organiza�on because
In Allah We Believe & In People We Trust We will always conduct ourselves with integrity
and strive to be the best
CONTENTS
COMPANY INFORMATION
VISION & MISSION STATEMENT
NOTICE OF ANNUAL GENERAL MEETING
KEY OPERATING & FINANCIAL DATA
DIRECTORS’ REPORT
STATEMENT OF COMPLIANCE WITH BEST PRACTICES OF CODE OF CORPORATE GOVERNANCE
PATTERN OF SHAREHOLDING OF ORDINARY SHARES
FORM OF PROXY
03
04
05
07
08
14
18
20
22
23
24
25
26
59
63
17
STATEMENT OF FINANCIAL POSITION
STATEMENT OF PROFIT OR LOSS
STATEMENT OF COMPREHENSIVE INCOME
STATEMENT OF CASH FLOWS
STATEMENT OF CHANGES IN EQUITY
NOTES TO THE FINANCIAL STATEMENTS
INDEPENDENT AUDITOR'S REPORT
INDEPENDENT AUDITOR'S REVIEW REPORT
Registered Office
4-F, Gulberg II, Lahore.Phones : (042) 35754371, 35754373E-mail : [email protected] : (042) 35754394
Mills
Muzaffargarh Road, Jauharabad Phones: (0454) 720645, 720546, 720311
Bankers
Auditors
Company Secretary
Syed Abid Raza Zaidi
Chief Financial Officer
Mr. Hasan Shahnawaz
Human Resources & Remunera�on Commi�ee
Audit Commi�ee
Board Of Directors
Company Informa�on
03
Na�onal Bank Of PakistanSilk Bank LimitedThe Bank of PunjabMeezan Bank LimitedHabib Bank Limited
M/s Rahman Sarfaraz Rahim Iqbal RafiqChartered Accountants
ChairmanMemberMember
Mst. Munira SalahuddinMian Sohail Salahuddin
ChairmanMember MemberSecretary
Muhammad Khalil La�f Mian Asad SalahuddinMian Sohail SalahuddinSyed Abid Raza Zaidi
Chief Execu�ve OfficerMian Iqbal SalahuddinMst. Munira SalahuddinMian Yousaf SalahuddinMian Asad SalahuddinMian Sohail SalahuddinMuhammad Khalil La�f Syed Abid Raza ZaidiUsman Shahid
Annual Report 2019Sally Tex�le Mills Limited
Muhammad Khalil La�f
CONTENTS
COMPANY INFORMATION
VISION & MISSION STATEMENT
NOTICE OF ANNUAL GENERAL MEETING
KEY OPERATING & FINANCIAL DATA
DIRECTORS’ REPORT
STATEMENT OF COMPLIANCE WITH BEST PRACTICES OF CODE OF CORPORATE GOVERNANCE
PATTERN OF SHAREHOLDING OF ORDINARY SHARES
FORM OF PROXY
03
04
05
07
08
14
18
20
22
23
24
25
26
59
63
17
STATEMENT OF FINANCIAL POSITION
STATEMENT OF PROFIT OR LOSS
STATEMENT OF COMPREHENSIVE INCOME
STATEMENT OF CASH FLOWS
STATEMENT OF CHANGES IN EQUITY
NOTES TO THE FINANCIAL STATEMENTS
INDEPENDENT AUDITOR'S REPORT
INDEPENDENT AUDITOR'S REVIEW REPORT
Registered Office
4-F, Gulberg II, Lahore.Phones : (042) 35754371, 35754373E-mail : [email protected] : (042) 35754394
Mills
Muzaffargarh Road, Jauharabad Phones: (0454) 720645, 720546, 720311
Bankers
Auditors
Company Secretary
Syed Abid Raza Zaidi
Chief Financial Officer
Mr. Hasan Shahnawaz
Human Resources & Remunera�on Commi�ee
Audit Commi�ee
Board Of Directors
Company Informa�on
03
Na�onal Bank Of PakistanSilk Bank LimitedThe Bank of PunjabMeezan Bank LimitedHabib Bank Limited
M/s Rahman Sarfaraz Rahim Iqbal RafiqChartered Accountants
ChairmanMemberMember
Mst. Munira SalahuddinMian Sohail Salahuddin
ChairmanMember MemberSecretary
Muhammad Khalil La�f Mian Asad SalahuddinMian Sohail SalahuddinSyed Abid Raza Zaidi
Chief Execu�ve OfficerMian Iqbal SalahuddinMst. Munira SalahuddinMian Yousaf SalahuddinMian Asad SalahuddinMian Sohail SalahuddinMuhammad Khalil La�f Syed Abid Raza ZaidiUsman Shahid
Annual Report 2019Sally Tex�le Mills Limited
Muhammad Khalil La�f
Vision and Mission Statement
Vision
Mission
To achieve consistent superior performance in all respects, provide quality products to our valued customer and run the company purely on professional grounds
Statement of Ethics and Business Prac�ces
Ÿ Con�nuous improvement in total quality performance by achieving high standards in our products and providing these to our customers without error, on �me and every �me.
Ÿ We are dedicated to supply the product of highest quality and standards, yet at a reasonable cost for our na�onal and interna�onal customer’s sa�sfac�on.
Ÿ All of our commitments, ac�ons and products must be recognized as an expression of quality.
Ÿ We are commi�ed to improve our skills and know-how, competency, prac�cal experience and training of employees by implemen�ng quality system.
Ÿ We con�nuously improve the performance of quality standards through prac�cal par�cipa�on of our employees at all levels.
Ÿ Our mission is to meet Na�onal and Interna�onal Standards, Customers’ Sa�sfac�on and Con�nuous Improvements in our standards through use of latest methods and employees sa�sfac�on.
We believe that a complete code of ethics is essen�al for the maintenance of integrity and professionalism in the day-to-day func�oning of Sally Tex�le Mills Limited. We always place the Company’s interest first through resource management namely human, financial and other infra structural facili�es and to ensure reasonable return to all the shareholders. Conduct business as a responsible and law abiding corporate member of society to achieve its legi�mate commercial objec�ve and supports uncondi�onally the Compliance with best Prac�ces of Corporate Governance for the be�erment of corporate culture. We develop and observe cost effec�ve prac�ces in our ac�vi�es and strive for excellence and quality. We encourage ini�a�ve and self-realiza�on in employees through meaningful empowerment.
04
Sally Tex�le Mills Limited
05
No�ce of Annual General Mee�ng
st thNo�ce is hereby given that 51 Annual General Mee�ng of the company will be held on Friday 25 October, 2019 at 10:00 a.m. at Noor Mahal, 1 Rasool Park, LOS, Lahore to transact the following business.
1. To confirm the minutes of 50th Annual General Mee�ng held on 27-10-2018.
2. To receive and adopt the audited accounts of the company along with the Directors and Auditor's reports for the year ended June 30, 2019.
3. To appoint the Auditors and fix their remunera�on for the next financial year 2019-2020.
4. Any other ma�er with the permission of the chair.
Date: October 05, 2019Place: LAHORE
NOTES
I. The shares transfer books of the company will remain closed from 18-10-2019 to 25-10-2019. (Both days inclusive). Transfer received in order by the Share Registrar M/S Corplink (Pvt) Ltd Wing Arcade, 1-K, Commercial, Model Town, Lahore 17-10-2019 will be consider in �me for the purpose of a�endance at the Annual General Mee�ng.
II. A member, who has deposited his/her shares into Central Depositary Company of Pakistan Limited, must bring his/her par�cipant's ID number and CDC account/sub-account number along with original Computerized Na�onal Iden�ty Card (CNIC) or original Passport at the �me of a�ending the mee�ng.
III. A member en�tled to a�end and vote at the mee�ng may appoint another member as his/her proxy to a�end, speak and vote instead of his/her.
IV. Forms of proxy, in order to be valid must be properly filled-in/executed and received at the registered office of the company situated at 4-F, Gulberg-II, Lahore not later than 48 hours before the �me of the mee�ng.
V. Members are requested to promptly no�fy change in their addresses to Share Registrar of the Company M/S Corplink (Pvt) Ltd, wings arcade, 1-K, commercial, Model Town, Lahore.
VI. Members who have not yet submi�ed photocopy of their valid Computerized Na�onal Iden�ty Card (CNIC) are requested to send the same to our Share Registrar at the earliest.
VII. Form of proxy is being sent to the members.
SYED ABID RAZA ZAIDI(Company Secretary)
By the order of the Board
Sally Tex�le Mills Limited Annual Report 2019Annual Report 2019
Vision and Mission Statement
Vision
Mission
To achieve consistent superior performance in all respects, provide quality products to our valued customer and run the company purely on professional grounds
Statement of Ethics and Business Prac�ces
Ÿ Con�nuous improvement in total quality performance by achieving high standards in our products and providing these to our customers without error, on �me and every �me.
Ÿ We are dedicated to supply the product of highest quality and standards, yet at a reasonable cost for our na�onal and interna�onal customer’s sa�sfac�on.
Ÿ All of our commitments, ac�ons and products must be recognized as an expression of quality.
Ÿ We are commi�ed to improve our skills and know-how, competency, prac�cal experience and training of employees by implemen�ng quality system.
Ÿ We con�nuously improve the performance of quality standards through prac�cal par�cipa�on of our employees at all levels.
Ÿ Our mission is to meet Na�onal and Interna�onal Standards, Customers’ Sa�sfac�on and Con�nuous Improvements in our standards through use of latest methods and employees sa�sfac�on.
We believe that a complete code of ethics is essen�al for the maintenance of integrity and professionalism in the day-to-day func�oning of Sally Tex�le Mills Limited. We always place the Company’s interest first through resource management namely human, financial and other infra structural facili�es and to ensure reasonable return to all the shareholders. Conduct business as a responsible and law abiding corporate member of society to achieve its legi�mate commercial objec�ve and supports uncondi�onally the Compliance with best Prac�ces of Corporate Governance for the be�erment of corporate culture. We develop and observe cost effec�ve prac�ces in our ac�vi�es and strive for excellence and quality. We encourage ini�a�ve and self-realiza�on in employees through meaningful empowerment.
04
Sally Tex�le Mills Limited
05
No�ce of Annual General Mee�ng
st thNo�ce is hereby given that 51 Annual General Mee�ng of the company will be held on Friday 25 October, 2019 at 10:00 a.m. at Noor Mahal, 1 Rasool Park, LOS, Lahore to transact the following business.
1. To confirm the minutes of 50th Annual General Mee�ng held on 27-10-2018.
2. To receive and adopt the audited accounts of the company along with the Directors and Auditor's reports for the year ended June 30, 2019.
3. To appoint the Auditors and fix their remunera�on for the next financial year 2019-2020.
4. Any other ma�er with the permission of the chair.
Date: October 05, 2019Place: LAHORE
NOTES
I. The shares transfer books of the company will remain closed from 18-10-2019 to 25-10-2019. (Both days inclusive). Transfer received in order by the Share Registrar M/S Corplink (Pvt) Ltd Wing Arcade, 1-K, Commercial, Model Town, Lahore 17-10-2019 will be consider in �me for the purpose of a�endance at the Annual General Mee�ng.
II. A member, who has deposited his/her shares into Central Depositary Company of Pakistan Limited, must bring his/her par�cipant's ID number and CDC account/sub-account number along with original Computerized Na�onal Iden�ty Card (CNIC) or original Passport at the �me of a�ending the mee�ng.
III. A member en�tled to a�end and vote at the mee�ng may appoint another member as his/her proxy to a�end, speak and vote instead of his/her.
IV. Forms of proxy, in order to be valid must be properly filled-in/executed and received at the registered office of the company situated at 4-F, Gulberg-II, Lahore not later than 48 hours before the �me of the mee�ng.
V. Members are requested to promptly no�fy change in their addresses to Share Registrar of the Company M/S Corplink (Pvt) Ltd, wings arcade, 1-K, commercial, Model Town, Lahore.
VI. Members who have not yet submi�ed photocopy of their valid Computerized Na�onal Iden�ty Card (CNIC) are requested to send the same to our Share Registrar at the earliest.
VII. Form of proxy is being sent to the members.
SYED ABID RAZA ZAIDI(Company Secretary)
By the order of the Board
Sally Tex�le Mills Limited Annual Report 2019Annual Report 2019
06
Sally Tex�le Mills Limited
07
Non-current assets
Current assets
Total assets
Share capital & reserves
Total equity
Current liabili�es
Total
Sales
Gross (loss)/profit
(Loss) / Profit before tax
Tax
(Loss) / Profit a�er tax
Surplus on revalua�on
OPERATING PERFORMANCE
FINANCIAL POSITION
Non-current liabili�es
Total liabili�es
Assets
Equity & liabili�es
Key Opera�ng and Financial Data
Rupees in million
Sally Tex�le Mills Limited Annual Report 2019Annual Report 2019
2013
3,647
398
210
56
154
1,050
757
1,807
353
262
615
391
801
1,807
1,192
2014
3,796
182
7
29
(22)
1,141
828
1,969
336
248
584
416
969
1,969
1,385
2015
3,280
(19)
(210)
(10)
(200)
1,212
1,260
2,472
150
232
382
510
1,580
2,472
2,090
2016
2,192
(197)
(209)
34
(243)
1,042
1,215
2,257
(241)
247
7
529
1,721
2,257
2,250
2017
1,647
90
(10)
10
(21)
996
1,243
2,239
(256)
230
(26)
808
1,457
2,239
2,265
2018
1,913
(242)
(373)
25
(398)
957
838
1,796
(653)
227
(426)
844
1,378
1,796
2,222
2019
112
(155)
(329)
13
(316)
911
805
1,716
(964)
222
(742)
783
1,675
1,716
2,458
06
Sally Tex�le Mills Limited
07
Non-current assets
Current assets
Total assets
Share capital & reserves
Total equity
Current liabili�es
Total
Sales
Gross (loss)/profit
(Loss) / Profit before tax
Tax
(Loss) / Profit a�er tax
Surplus on revalua�on
OPERATING PERFORMANCE
FINANCIAL POSITION
Non-current liabili�es
Total liabili�es
Assets
Equity & liabili�es
Key Opera�ng and Financial Data
Rupees in million
Sally Tex�le Mills Limited Annual Report 2019Annual Report 2019
2013
3,647
398
210
56
154
1,050
757
1,807
353
262
615
391
801
1,807
1,192
2014
3,796
182
7
29
(22)
1,141
828
1,969
336
248
584
416
969
1,969
1,385
2015
3,280
(19)
(210)
(10)
(200)
1,212
1,260
2,472
150
232
382
510
1,580
2,472
2,090
2016
2,192
(197)
(209)
34
(243)
1,042
1,215
2,257
(241)
247
7
529
1,721
2,257
2,250
2017
1,647
90
(10)
10
(21)
996
1,243
2,239
(256)
230
(26)
808
1,457
2,239
2,265
2018
1,913
(242)
(373)
25
(398)
957
838
1,796
(653)
227
(426)
844
1,378
1,796
2,222
2019
112
(155)
(329)
13
(316)
911
805
1,716
(964)
222
(742)
783
1,675
1,716
2,458
08
Descrip�onJune 30, 2019Rs. in million
Turnover - net
Gross profit/(loss)
Loss before tax
Loss a�er tax
June 30, 2018Rs. in million
Directors’ Report
111.74
(154.98)
(328.57)
(315.77)
The Directors of Sally Tex�le Mills Limited (“the Company”) present the 51st annual report of the Company for the period ended June 30, 2019.
Overview - Performance review
During the period under review, mill opera�ons had been shut down due to nega�ve viability. As evident from our accounts, there was no business conducted.
The financial results in a summarized form are given hereunder:
Loss per share
Loss per share of your company for ended June 30, 2019 is Rs. (35.99) as compared to Rs. (45.35) for the compara�ve period ended June 30, 2018.
Going Concern assump�ons
The Company had been facing opera�onal losses. High cost of business is not being passed on because of slow off-take in the local industry. In addi�on, delays in approvals/post-approval formali�es from financial ins�tu�ons resulted in further losses.
a. Management remains op�mis�c that the government will provide relief to this sector as it remains the largest source of employment.
b. The Company has in the past relied on financial support of its sponsors. Same support can be expected provided it is augmented by favorable government policy.
Business, Risk, Challenges and Future Outlook
It is apparent and evident that Pakistani tex�le Industry is facing an uncertain environment. The industry is facing unprecedented crises and it seems that these condi�ons will con�nue to hit the industry un�l the government takes radical steps to revive it. Our sector remains the highest employment generator for the country. If the government does not facilitate this sector, many units like ours will shut down and thousands of jobs will be lost.
Corporate Social Responsibility (CSR)
Your company gives high priority to its social responsibili�es. However, due to nega�ve cash – our CSR levels were curtailed this year.
Sally Tex�le Mills Limited
1,912.53
(242.46)
(372.78)
(397.94)
09
Health Safety and Environment
Your company is well aware of the importance of workers and staff therefore the company is strongly commi�ed towards all aspects of safety, health and environment connected with our business.
Financial Statements
The Financial statements for the year ended June 30, 2019 were approved by the Board of Directors on October 04, 2019 and authorized for their issuance. Opera�ng and financial data of last six years is annexed.
Code of corporate governance
The requirements of the Code of Corporate Governance set out by the Pakistan Stock Exchange in its lis�ng regula�ons, relevant for the year ended June 30, 2019 have been adopted by the company and have been duly complied with. Statement to this effect is annexed to the report.
Pa�ern of Shareholding
The pa�ern of shareholding and addi�onal informa�on regarding pa�ern of shareholding is a�ached separately.
No trade in the shares of company was carried out by CEO, CFO and Company Secretary and their spouses and minor children except those that have been duly reported as per law.
Board Mee�ng and A�endance
During the year four mee�ngs of the Board of Directors of the company were held a�endance by each director is narrated below:-
Sally Tex�le Mills Limited Annual Report 2019Annual Report 2019
Sr. No. Name A�endance
Mian Iqbal Salahuddin
Mian Yousaf Salahuddin
Mian Asad Salahuddin
Mst. Munira Salahuddin
Mian Sohail Salahuddin
Sh. Abdul Salam (Deceased)
Syed Abid Raza Zaidi
Usman Khalil
M.khalil La�f
1.
2.
3.
4.
5.
6.
7.
8.
9.
4
4
4
4
4
2
4
0
2
08
Descrip�onJune 30, 2019Rs. in million
Turnover - net
Gross profit/(loss)
Loss before tax
Loss a�er tax
June 30, 2018Rs. in million
Directors’ Report
111.74
(154.98)
(328.57)
(315.77)
The Directors of Sally Tex�le Mills Limited (“the Company”) present the 51st annual report of the Company for the period ended June 30, 2019.
Overview - Performance review
During the period under review, mill opera�ons had been shut down due to nega�ve viability. As evident from our accounts, there was no business conducted.
The financial results in a summarized form are given hereunder:
Loss per share
Loss per share of your company for ended June 30, 2019 is Rs. (35.99) as compared to Rs. (45.35) for the compara�ve period ended June 30, 2018.
Going Concern assump�ons
The Company had been facing opera�onal losses. High cost of business is not being passed on because of slow off-take in the local industry. In addi�on, delays in approvals/post-approval formali�es from financial ins�tu�ons resulted in further losses.
a. Management remains op�mis�c that the government will provide relief to this sector as it remains the largest source of employment.
b. The Company has in the past relied on financial support of its sponsors. Same support can be expected provided it is augmented by favorable government policy.
Business, Risk, Challenges and Future Outlook
It is apparent and evident that Pakistani tex�le Industry is facing an uncertain environment. The industry is facing unprecedented crises and it seems that these condi�ons will con�nue to hit the industry un�l the government takes radical steps to revive it. Our sector remains the highest employment generator for the country. If the government does not facilitate this sector, many units like ours will shut down and thousands of jobs will be lost.
Corporate Social Responsibility (CSR)
Your company gives high priority to its social responsibili�es. However, due to nega�ve cash – our CSR levels were curtailed this year.
Sally Tex�le Mills Limited
1,912.53
(242.46)
(372.78)
(397.94)
09
Health Safety and Environment
Your company is well aware of the importance of workers and staff therefore the company is strongly commi�ed towards all aspects of safety, health and environment connected with our business.
Financial Statements
The Financial statements for the year ended June 30, 2019 were approved by the Board of Directors on October 04, 2019 and authorized for their issuance. Opera�ng and financial data of last six years is annexed.
Code of corporate governance
The requirements of the Code of Corporate Governance set out by the Pakistan Stock Exchange in its lis�ng regula�ons, relevant for the year ended June 30, 2019 have been adopted by the company and have been duly complied with. Statement to this effect is annexed to the report.
Pa�ern of Shareholding
The pa�ern of shareholding and addi�onal informa�on regarding pa�ern of shareholding is a�ached separately.
No trade in the shares of company was carried out by CEO, CFO and Company Secretary and their spouses and minor children except those that have been duly reported as per law.
Board Mee�ng and A�endance
During the year four mee�ngs of the Board of Directors of the company were held a�endance by each director is narrated below:-
Sally Tex�le Mills Limited Annual Report 2019Annual Report 2019
Sr. No. Name A�endance
Mian Iqbal Salahuddin
Mian Yousaf Salahuddin
Mian Asad Salahuddin
Mst. Munira Salahuddin
Mian Sohail Salahuddin
Sh. Abdul Salam (Deceased)
Syed Abid Raza Zaidi
Usman Khalil
M.khalil La�f
1.
2.
3.
4.
5.
6.
7.
8.
9.
4
4
4
4
4
2
4
0
2
10
HR and Remunera�on Commi�ee
During the year, one mee�ng of HR and Remunera�on Commi�ee of the company was held; a�endance by each member is as under.
Sally Tex�le Mills Limited
11
Sr. No. Name A�endance
1
2
3
Sh. Abdul Salam
Mst. Munera Salahuddin
1
1
1Mian Sohail Salahuddin
Auditors
The present auditors M/S. Rehman Sarfraz Rahim Iqbal Rafique Chartered Accountants re�red and are being eligible offer themselves for re-appointment as auditors of the company for the year 2019-20. The audit commi�ee has recommended the appointment of aforesaid auditors M/S. Rehman Sarfraz Rahim Iqbal Rafique Chartered Accountants, as external auditor for the year ended June 30, 2019. The External auditors, M/S. Rehman Sarfraz Rahim Iqbal Rafique Chartered Accountants have been given sa�sfactory ra�ng under the quality review program of the Ins�tute of Chartered Accountants of Pakistan and the firm and its en�re partner are in compliance with the Interna�onal Federa�on of Accountants' guidelines on the code of ethics as adopted by the Ins�tute of Chartered Accountants of Pakistan.
Acknowledgement
Yours directors record with apprecia�on, the efforts of the company's managers, technicians, staff and workers who have vigorously to meet the target. Your directors also extend their apprecia�on to the company's banker, buyers and suppliers for their coopera�on.
Lahore: October 04, 2019
For and on behalf of the Board
MIAN IQBAL SALAHUDDIN
Chief Execu�ve Officer
Sally Tex�le Mills Limited Annual Report 2019Annual Report 2019
Audit Commi�ee Mee�ng and A�endance
During the year four mee�ngs of the audit commi�ee of the company were held; a�endance by each member is as under.
Sr. No. Name A�endance
1
2
3
2
4
4
4 2
Sh. Abdul Salam (Deceased)
Mian Asad Salahuddin
Mian Sohail Salahuddin
M. Khalil La�f
10
HR and Remunera�on Commi�ee
During the year, one mee�ng of HR and Remunera�on Commi�ee of the company was held; a�endance by each member is as under.
Sally Tex�le Mills Limited
11
Sr. No. Name A�endance
1
2
3
Sh. Abdul Salam
Mst. Munera Salahuddin
1
1
1Mian Sohail Salahuddin
Auditors
The present auditors M/S. Rehman Sarfraz Rahim Iqbal Rafique Chartered Accountants re�red and are being eligible offer themselves for re-appointment as auditors of the company for the year 2019-20. The audit commi�ee has recommended the appointment of aforesaid auditors M/S. Rehman Sarfraz Rahim Iqbal Rafique Chartered Accountants, as external auditor for the year ended June 30, 2019. The External auditors, M/S. Rehman Sarfraz Rahim Iqbal Rafique Chartered Accountants have been given sa�sfactory ra�ng under the quality review program of the Ins�tute of Chartered Accountants of Pakistan and the firm and its en�re partner are in compliance with the Interna�onal Federa�on of Accountants' guidelines on the code of ethics as adopted by the Ins�tute of Chartered Accountants of Pakistan.
Acknowledgement
Yours directors record with apprecia�on, the efforts of the company's managers, technicians, staff and workers who have vigorously to meet the target. Your directors also extend their apprecia�on to the company's banker, buyers and suppliers for their coopera�on.
Lahore: October 04, 2019
For and on behalf of the Board
MIAN IQBAL SALAHUDDIN
Chief Execu�ve Officer
Sally Tex�le Mills Limited Annual Report 2019Annual Report 2019
Audit Commi�ee Mee�ng and A�endance
During the year four mee�ngs of the audit commi�ee of the company were held; a�endance by each member is as under.
Sr. No. Name A�endance
1
2
3
2
4
4
4 2
Sh. Abdul Salam (Deceased)
Mian Asad Salahuddin
Mian Sohail Salahuddin
M. Khalil La�f
12
Annual Report 2019Sally Tex�le Mills Limited
13
Sally Tex�le Mills Limited Annual Report 2019
12
Annual Report 2019Sally Tex�le Mills Limited
13
Sally Tex�le Mills Limited Annual Report 2019
Category Names
Independent Director
Execu�ve Directors
Other Non-Execu�ve Directors
M. Khalil La�f
Mst. Munira Salahuddin
Mian Asad Salahuddin
Syed Abid Raza Zaidi
Usman Shahid
Mian Sohail Salahuddin
Mian Iqbal Salahuddin
Mian Yousaf Salahuddin
Statement of Compliance with Listed Companies(Code of Corporate Governance) Regula�ons 2017
for the year ended June 30, 2019
The company has complied with the requirements of the Regula�ons in the following manner:
1. The total number of directors are eight as per the following:
a) Male: Seven b) Female: One
2. The composi�on of board is as follows:
3. The directors have confirmed that none of them is serving as a director on more than five listed companies, including this company;
4. The company has prepared a code of conduct and has ensured that appropriate steps have been taken to disseminate it throughout the company along with its suppor�ng policies and procedures;
5. The Board has developed a vision/mission statement, overall corporate strategy and significant policies of the company. The Board has ensured that complete record of par�culars of the significant policies along with their date of approval or upda�ng is maintained by the company;
6. All the powers of the Board have been duly exercised and decisions on relevant ma�ers have been taken by the Board/ shareholders as empowered by the relevant provisions of the Act and these Regula�ons;
7. The mee�ngs of the Board were presided over by the Chairman and, in his absence, by a director elected by the Board for this purpose. The Board has complied with the requirements of Act and the Regula�ons with respect to frequency, recording and circula�ng minutes of mee�ng of the Board;
8. The Board have a formal policy and transparent procedures for remunera�on of directors in accordance with the Act and these Regula�ons;
9. The board has not arranged any Directors Training Program for its directors during the year.
14
Sally Tex�le Mills Limited Annual Report 2019
15
Sally Tex�le Mills Limited Annual Report 2019
Lahore: October 04, 2019
For and on behalf of the Board
MIAN IQBAL SALAHUDDIN
Chief Execu�ve Officer
10. The Board has approved appointment of chief financial officer, company secretary and head of internal audit, including their remunera�on and terms and condi�ons of employment and complied with relevant requirements of the Regula�ons;
11. Chief Financial Officer and Chief Execu�ve Officer duly endorsed the financial statements before approval of the Board.
12. The Board has formed commi�ees comprising of members given below.-
a) Audit Commi�ee:
1. Sheikh Abdul Salam (Deceased) [14-02-2019] 2. Mr. Muhammad Khalil La�f [14-02-2019] 3. Mian Asad Salahuddin 4. Mian Sohail Salahuddin
b) HR and Remunera�on Commi�ee:
1. Sheikh Abdul Salam (Deceased) [14-02-2019] 2. Mr. Muhammad Khalil La�f [14-02-2019] 3. Mst. Munira Salahuddin 4. Mian Sohail Salahuddin
13. The terms of reference of the aforesaid commi�ees have been formed, documented and advised to the commi�ee for compliance;
14. The frequency of mee�ngs (quarterly/half yearly/ yearly) of the commi�ee were as per following,-
a) Audit Commi�ee (Quarterly)
b) HR and Remunera�on Commi�ee (Yearly)
15. The Board has set up an effec�ve internal audit func�on/ or has outsourced the internal audit func�on to who are considered suitably qualified and experienced for the purpose and are conversant with the policies and procedures of the company;
16. The statutory auditors of the company have confirmed that they have been given a sa�sfactory ra�ng under the quality control review program of the ICAP and registered with Audit Oversight Board of Pakistan, that they or any of the partners of the firm, their spouses and minor children do not hold shares of the company and that the firm and all its partners are in compliance with Interna�onal Federa�on of Accountants (IFAC) guidelines on code of ethics as adopted by the ICAP;
17. The statutory auditors or the persons associated with them have not been appointed to provide other services except in accordance with the Act, these Regula�ons or any other regulatory requirement and the auditors have confirmed that they have observed IFAC guidelines in this regard;
18. We confirm that all offers requirements of the regula�ons have been complied with except that the Board has not yet put in place a mechanism for annual evalua�on of its performance.
Category Names
Independent Director
Execu�ve Directors
Other Non-Execu�ve Directors
M. Khalil La�f
Mst. Munira Salahuddin
Mian Asad Salahuddin
Syed Abid Raza Zaidi
Usman Shahid
Mian Sohail Salahuddin
Mian Iqbal Salahuddin
Mian Yousaf Salahuddin
Statement of Compliance with Listed Companies(Code of Corporate Governance) Regula�ons 2017
for the year ended June 30, 2019
The company has complied with the requirements of the Regula�ons in the following manner:
1. The total number of directors are eight as per the following:
a) Male: Seven b) Female: One
2. The composi�on of board is as follows:
3. The directors have confirmed that none of them is serving as a director on more than five listed companies, including this company;
4. The company has prepared a code of conduct and has ensured that appropriate steps have been taken to disseminate it throughout the company along with its suppor�ng policies and procedures;
5. The Board has developed a vision/mission statement, overall corporate strategy and significant policies of the company. The Board has ensured that complete record of par�culars of the significant policies along with their date of approval or upda�ng is maintained by the company;
6. All the powers of the Board have been duly exercised and decisions on relevant ma�ers have been taken by the Board/ shareholders as empowered by the relevant provisions of the Act and these Regula�ons;
7. The mee�ngs of the Board were presided over by the Chairman and, in his absence, by a director elected by the Board for this purpose. The Board has complied with the requirements of Act and the Regula�ons with respect to frequency, recording and circula�ng minutes of mee�ng of the Board;
8. The Board have a formal policy and transparent procedures for remunera�on of directors in accordance with the Act and these Regula�ons;
9. The board has not arranged any Directors Training Program for its directors during the year.
14
Sally Tex�le Mills Limited Annual Report 2019
15
Sally Tex�le Mills Limited Annual Report 2019
Lahore: October 04, 2019
For and on behalf of the Board
MIAN IQBAL SALAHUDDIN
Chief Execu�ve Officer
10. The Board has approved appointment of chief financial officer, company secretary and head of internal audit, including their remunera�on and terms and condi�ons of employment and complied with relevant requirements of the Regula�ons;
11. Chief Financial Officer and Chief Execu�ve Officer duly endorsed the financial statements before approval of the Board.
12. The Board has formed commi�ees comprising of members given below.-
a) Audit Commi�ee:
1. Sheikh Abdul Salam (Deceased) [14-02-2019] 2. Mr. Muhammad Khalil La�f [14-02-2019] 3. Mian Asad Salahuddin 4. Mian Sohail Salahuddin
b) HR and Remunera�on Commi�ee:
1. Sheikh Abdul Salam (Deceased) [14-02-2019] 2. Mr. Muhammad Khalil La�f [14-02-2019] 3. Mst. Munira Salahuddin 4. Mian Sohail Salahuddin
13. The terms of reference of the aforesaid commi�ees have been formed, documented and advised to the commi�ee for compliance;
14. The frequency of mee�ngs (quarterly/half yearly/ yearly) of the commi�ee were as per following,-
a) Audit Commi�ee (Quarterly)
b) HR and Remunera�on Commi�ee (Yearly)
15. The Board has set up an effec�ve internal audit func�on/ or has outsourced the internal audit func�on to who are considered suitably qualified and experienced for the purpose and are conversant with the policies and procedures of the company;
16. The statutory auditors of the company have confirmed that they have been given a sa�sfactory ra�ng under the quality control review program of the ICAP and registered with Audit Oversight Board of Pakistan, that they or any of the partners of the firm, their spouses and minor children do not hold shares of the company and that the firm and all its partners are in compliance with Interna�onal Federa�on of Accountants (IFAC) guidelines on code of ethics as adopted by the ICAP;
17. The statutory auditors or the persons associated with them have not been appointed to provide other services except in accordance with the Act, these Regula�ons or any other regulatory requirement and the auditors have confirmed that they have observed IFAC guidelines in this regard;
18. We confirm that all offers requirements of the regula�ons have been complied with except that the Board has not yet put in place a mechanism for annual evalua�on of its performance.
17
To the members of SALLY TEXTILE MILLS LIMITED
INDEPENDENT AUDITOR'S REVIEW REPORT
Review Report on the Statement of Compliance contained in Listed Companies (Code of Corporate Governance) Regula�ons, 2017
We were engaged to reviewed the enclosed Statement of Compliance with the Listed Companies (Code of Corporate Governance) Regula�ons, 2017 ['the Regula�ons'] prepared by the Board of Directors of SALLY TEXTILE MILLS LIMITED for the year ended June 30, 2019 in accordance with the requirements of regula�on 40 of the Regula�on.
The responsibility for compliance with the Regula�ons is that of the Board of Directors of the Company. Our responsibility is to review whether the Statement of Compliance reflects the status of the Company's compliance with the provisions of the Regula�ons and report if it does not and to highlight any non-compliance with the requirements of the Regula�ons. A review is limited primarily to inquiries of the Company's personnel and review of various documents prepared by the Company to comply with the Regula�ons.
As a part of our audit of the financial statements we are required to obtain an understanding of the accoun�ng and internal control systems sufficient to plan the audit and develop an effec�ve audit approach. We are not required to consider whether the Board of Directors' statement on internal control covers all risks and controls or to form an opinion on the effec�veness of such internal controls, the Company's corporate governance procedures and risks.
The Regula�ons require the Company to place before the Audit Commi�ee, and upon recommenda�on of the Audit Commi�ee, place before the Board of Directors for their review and approval, its related party transac�ons and also ensure compliance with the requirements of sec�on 208 of the Companies Act, 2017. We are only required to ensure compliance of this requirement to the extent of the approval of the related party transac�ons by the Board of Directors upon recommenda�on of the Audit Commi�ee. We have not carried out procedures to assess and determine the Company's process for iden�fica�on of related par�es and that whether the related party transac�ons were undertaken at arm's length price or not.
No informa�on necessary for the purpose of review was provided to us, accordingly, we do not express our conclusion as to whether the Statement of Compliance appropriately reflects the Company's compliance, in all material respects, with the requirements contained in the Regula�ons as applicable to the Company for the year ended June 30, 2019.
RAHMAN SARFARAZ RAHIM IQBAL RAFIQChartered Accountants
Lahore: October 04, 2019
Sally Tex�le Mills Limited Annual Report 2019
FINANCIAL STATEMENTS
17
To the members of SALLY TEXTILE MILLS LIMITED
INDEPENDENT AUDITOR'S REVIEW REPORT
Review Report on the Statement of Compliance contained in Listed Companies (Code of Corporate Governance) Regula�ons, 2017
We were engaged to reviewed the enclosed Statement of Compliance with the Listed Companies (Code of Corporate Governance) Regula�ons, 2017 ['the Regula�ons'] prepared by the Board of Directors of SALLY TEXTILE MILLS LIMITED for the year ended June 30, 2019 in accordance with the requirements of regula�on 40 of the Regula�on.
The responsibility for compliance with the Regula�ons is that of the Board of Directors of the Company. Our responsibility is to review whether the Statement of Compliance reflects the status of the Company's compliance with the provisions of the Regula�ons and report if it does not and to highlight any non-compliance with the requirements of the Regula�ons. A review is limited primarily to inquiries of the Company's personnel and review of various documents prepared by the Company to comply with the Regula�ons.
As a part of our audit of the financial statements we are required to obtain an understanding of the accoun�ng and internal control systems sufficient to plan the audit and develop an effec�ve audit approach. We are not required to consider whether the Board of Directors' statement on internal control covers all risks and controls or to form an opinion on the effec�veness of such internal controls, the Company's corporate governance procedures and risks.
The Regula�ons require the Company to place before the Audit Commi�ee, and upon recommenda�on of the Audit Commi�ee, place before the Board of Directors for their review and approval, its related party transac�ons and also ensure compliance with the requirements of sec�on 208 of the Companies Act, 2017. We are only required to ensure compliance of this requirement to the extent of the approval of the related party transac�ons by the Board of Directors upon recommenda�on of the Audit Commi�ee. We have not carried out procedures to assess and determine the Company's process for iden�fica�on of related par�es and that whether the related party transac�ons were undertaken at arm's length price or not.
No informa�on necessary for the purpose of review was provided to us, accordingly, we do not express our conclusion as to whether the Statement of Compliance appropriately reflects the Company's compliance, in all material respects, with the requirements contained in the Regula�ons as applicable to the Company for the year ended June 30, 2019.
RAHMAN SARFARAZ RAHIM IQBAL RAFIQChartered Accountants
Lahore: October 04, 2019
Sally Tex�le Mills Limited Annual Report 2019
FINANCIAL STATEMENTS
18
Sally Tex�le Mills Limited Annual Report 2019
19
To the members of SALLY TEXTILE MILLS LIMITEDReport on the Audit of the Financial Statements
INDEPENDENT AUDITOR'S REPORT
Disclaimer of Opinion
We were engaged to audit the annexed financial statements of SALLY TEXTILE MILLS LIMITED ['the Company'], which comprise the statement of financial posi�on as at June 30, 2019, the statement of profit or loss, the statement of comprehensive income, the statement of changes in equity, the statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accoun�ng policies and other explanatory informa�on.
We do not express an opinion on the accompanying financial statements of the Company. Because of the significance of the ma�ers described in the 'Basis for Disclaimer of Opinion' sec�on of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements.
Basis for Disclaimer of Opinion
We were not provided access to factory premises by the management of the Company because of fear of escala�on from labour force due to which we were unable to observe the coun�ng of physical inventories and to conduct physical verifica�on of property, plant and equipment at the end of the year. We were unable to sa�sfy ourselves by alterna�ve means concerning the inventory and property, plant and equipment held by the Company at June 30, 2019 which are stated in the statement of financial posi�on at Rs. 565.44 million and Rs. 899.998 million, respec�vely. Further, the Company was unable to provided us access to its books of account and other informa�on, present at factory premises, which were necessary for the purpose of our audit.
As a result of these ma�ers, we were unable to determine whether any adjustments might have been found necessary in respect of recorded or unrecorded elements making up the statement of financial posi�on, the statement of profit or loss, the statement of comprehensive income, the statement of changes in equity and the statement of cash flows.
Responsibili�es of Management and Board of Directors for the Financial Statements
Management is responsible for the prepara�on and fair presenta�on of the financial statements in accordance with the accoun�ng and repor�ng standards as applicable in Pakistan and the requirements of Companies Act, 2017(XIX of 2017) and for such internal control as management determines is necessary to enable the prepara�on of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company's ability to con�nue as a going concern, disclosing, as applicable, ma�ers related to going concern and using the going concern basis of accoun�ng unless management either intends to liquidate the Company or to cease opera�ons, or has no realis�c alterna�ve but to do so.
Board of directors are responsible for overseeing the Company's financial repor�ng process.
Auditor's Responsibili�es for the Audit of the Financial Statements
Our responsibility is to conduct an audit of the Company's financial statements in accordance with Interna�onal Standards on Audi�ng and to issue an auditor's report. However, because of the ma�ers described in the 'Basis for Disclaimer of Opinion' sec�on of our report, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements.
We are independent of the Company in accordance with the Interna�onal Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants as adopted by the Ins�tute of Chartered Accountants of Pakistan ['the Code'] and we have fulfilled our other ethical responsibili�es in accordance with the Code.
Report on Other Legal and Regulatory Requirements
Based on our audit, we further report that we are unable to express an opinion as to whether:
a) proper books of account have been kept by the Company as required by the Companies Act, 2017 (XIX of 2017);
b) the statement of financial posi�on, the statement of profit or loss, the statement of comprehensive income, the statement of changes in equity and the statement of cash flows together with the notes thereon have been drawn up in conformity with the Companies Act, 2017 (XIX of 2017) and are in agreement with the books of account and returns;
c) investments made, expenditure incurred and guarantees extended during the year were for the purpose of the Company's business; and
d) Zakat was deduc�ble at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), and if deduc�ble, was deducted by the Company and deposited in the Central Zakat Fund established under sec�on 7 of that ordinance.
The engagement partner on the audit resul�ng in this independent auditor's report is ZUBAIR IRFAN MALIK.
RAHMAN SARFARAZ RAHIM IQBAL RAFIQChartered Accountants
Lahore: October 04, 2019
Sally Tex�le Mills Limited Annual Report 2019
18
Sally Tex�le Mills Limited Annual Report 2019
19
To the members of SALLY TEXTILE MILLS LIMITEDReport on the Audit of the Financial Statements
INDEPENDENT AUDITOR'S REPORT
Disclaimer of Opinion
We were engaged to audit the annexed financial statements of SALLY TEXTILE MILLS LIMITED ['the Company'], which comprise the statement of financial posi�on as at June 30, 2019, the statement of profit or loss, the statement of comprehensive income, the statement of changes in equity, the statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accoun�ng policies and other explanatory informa�on.
We do not express an opinion on the accompanying financial statements of the Company. Because of the significance of the ma�ers described in the 'Basis for Disclaimer of Opinion' sec�on of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements.
Basis for Disclaimer of Opinion
We were not provided access to factory premises by the management of the Company because of fear of escala�on from labour force due to which we were unable to observe the coun�ng of physical inventories and to conduct physical verifica�on of property, plant and equipment at the end of the year. We were unable to sa�sfy ourselves by alterna�ve means concerning the inventory and property, plant and equipment held by the Company at June 30, 2019 which are stated in the statement of financial posi�on at Rs. 565.44 million and Rs. 899.998 million, respec�vely. Further, the Company was unable to provided us access to its books of account and other informa�on, present at factory premises, which were necessary for the purpose of our audit.
As a result of these ma�ers, we were unable to determine whether any adjustments might have been found necessary in respect of recorded or unrecorded elements making up the statement of financial posi�on, the statement of profit or loss, the statement of comprehensive income, the statement of changes in equity and the statement of cash flows.
Responsibili�es of Management and Board of Directors for the Financial Statements
Management is responsible for the prepara�on and fair presenta�on of the financial statements in accordance with the accoun�ng and repor�ng standards as applicable in Pakistan and the requirements of Companies Act, 2017(XIX of 2017) and for such internal control as management determines is necessary to enable the prepara�on of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company's ability to con�nue as a going concern, disclosing, as applicable, ma�ers related to going concern and using the going concern basis of accoun�ng unless management either intends to liquidate the Company or to cease opera�ons, or has no realis�c alterna�ve but to do so.
Board of directors are responsible for overseeing the Company's financial repor�ng process.
Auditor's Responsibili�es for the Audit of the Financial Statements
Our responsibility is to conduct an audit of the Company's financial statements in accordance with Interna�onal Standards on Audi�ng and to issue an auditor's report. However, because of the ma�ers described in the 'Basis for Disclaimer of Opinion' sec�on of our report, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements.
We are independent of the Company in accordance with the Interna�onal Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants as adopted by the Ins�tute of Chartered Accountants of Pakistan ['the Code'] and we have fulfilled our other ethical responsibili�es in accordance with the Code.
Report on Other Legal and Regulatory Requirements
Based on our audit, we further report that we are unable to express an opinion as to whether:
a) proper books of account have been kept by the Company as required by the Companies Act, 2017 (XIX of 2017);
b) the statement of financial posi�on, the statement of profit or loss, the statement of comprehensive income, the statement of changes in equity and the statement of cash flows together with the notes thereon have been drawn up in conformity with the Companies Act, 2017 (XIX of 2017) and are in agreement with the books of account and returns;
c) investments made, expenditure incurred and guarantees extended during the year were for the purpose of the Company's business; and
d) Zakat was deduc�ble at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), and if deduc�ble, was deducted by the Company and deposited in the Central Zakat Fund established under sec�on 7 of that ordinance.
The engagement partner on the audit resul�ng in this independent auditor's report is ZUBAIR IRFAN MALIK.
RAHMAN SARFARAZ RAHIM IQBAL RAFIQChartered Accountants
Lahore: October 04, 2019
Sally Tex�le Mills Limited Annual Report 2019
20
AS AT JUNE 30, 2019
STATEMENT OF FINANCIAL POSITION
MIAN YOUSAF SALAHUDDIN
Director
MIAN IQBAL SALAHUDDIN
Chief Execu�ve
HASSAN SHAHNAWAZ
Chief Financial OfficerLahore Date : October 04, 2019
Note 2019 2018
Rupees Rupees
EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVES
Authorized capital
20,000,000 (2018: 20,000,000) ordinary shares of Rs. 10 each 200,000,000 200,000,000
Issued, subscribed and paid-up capital 7 87,750,000 87,750,000
Surplus on revalua�on of property, plant and equipment 8 222,616,108 226,964,580
Accumulated loss (1,052,407,354) (740,978,714)
TOTAL EQUITY (742,041,246) (426,264,134)
LOAN FROM SPONSORS 9 617,898,653 536,882,933
NON-CURRENT LIABILITIES
Long term finances 10 - 127,083,336
Employees re�rement benefits 11 101,907,337 102,176,007
Deferred taxa�on 12 63,191,815 77,391,073
165,099,152 306,650,416
CURRENT LIABILITIES
Trade and other payables 13 459,033,373 405,775,267 Unclaimed dividend 1,010,033 1,010,033 Short term borrowings 14 722,658,630 723,642,983 Accrued interest/markup/profit 15 181,557,822 64,104,364 Current por�on of non-current liabili�es 310,833,334 183,749,998
1,675,093,192 1,378,282,645
TOTAL LIABILITIES 1,840,192,344 1,684,933,061
CONTINGENCIES AND COMMITMENTS 16
TOTAL EQUITY AND LIABILITIES 1,716,049,751 1,795,551,860
The annexed notes 1 to 47 form an integral part of these financial statements.
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
21
AS AT JUNE 30, 2019
STATEMENT OF FINANCIAL POSITION
MIAN YOUSAF SALAHUDDIN
Director
MIAN IQBAL SALAHUDDIN
Chief Execu�ve
HASSAN SHAHNAWAZ
Chief Financial OfficerLahore Date : October 04, 2019
Note 2019 2018
Rupees Rupees
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 17 899,998,866 945,929,046
Long term deposits 18 11,243,604 11,243,604
911,242,470 957,172,650
CURRENT ASSETS
Stores, spares and loose tools 19 80,622,598 80,723,129
Stock in trade 20 565,440,498 600,447,470
Trade debts 21 96,582,970 100,053,918
Advances, deposits, prepayments and other receivables 22 47,862,112 42,602,914
Current taxa�on 23 11,797,262 12,329,835
Cash and bank balances 24 2,501,841 2,221,944
804,807,281 838,379,210
TOTAL ASSETS 1,716,049,751 1,795,551,860
The annexed notes 1 to 47 form an integral part of these financial statements.
20
AS AT JUNE 30, 2019
STATEMENT OF FINANCIAL POSITION
MIAN YOUSAF SALAHUDDIN
Director
MIAN IQBAL SALAHUDDIN
Chief Execu�ve
HASSAN SHAHNAWAZ
Chief Financial OfficerLahore Date : October 04, 2019
Note 2019 2018
Rupees Rupees
EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVES
Authorized capital
20,000,000 (2018: 20,000,000) ordinary shares of Rs. 10 each 200,000,000 200,000,000
Issued, subscribed and paid-up capital 7 87,750,000 87,750,000
Surplus on revalua�on of property, plant and equipment 8 222,616,108 226,964,580
Accumulated loss (1,052,407,354) (740,978,714)
TOTAL EQUITY (742,041,246) (426,264,134)
LOAN FROM SPONSORS 9 617,898,653 536,882,933
NON-CURRENT LIABILITIES
Long term finances 10 - 127,083,336
Employees re�rement benefits 11 101,907,337 102,176,007
Deferred taxa�on 12 63,191,815 77,391,073
165,099,152 306,650,416
CURRENT LIABILITIES
Trade and other payables 13 459,033,373 405,775,267 Unclaimed dividend 1,010,033 1,010,033 Short term borrowings 14 722,658,630 723,642,983 Accrued interest/markup/profit 15 181,557,822 64,104,364 Current por�on of non-current liabili�es 310,833,334 183,749,998
1,675,093,192 1,378,282,645
TOTAL LIABILITIES 1,840,192,344 1,684,933,061
CONTINGENCIES AND COMMITMENTS 16
TOTAL EQUITY AND LIABILITIES 1,716,049,751 1,795,551,860
The annexed notes 1 to 47 form an integral part of these financial statements.
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
21
AS AT JUNE 30, 2019
STATEMENT OF FINANCIAL POSITION
MIAN YOUSAF SALAHUDDIN
Director
MIAN IQBAL SALAHUDDIN
Chief Execu�ve
HASSAN SHAHNAWAZ
Chief Financial OfficerLahore Date : October 04, 2019
Note 2019 2018
Rupees Rupees
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 17 899,998,866 945,929,046
Long term deposits 18 11,243,604 11,243,604
911,242,470 957,172,650
CURRENT ASSETS
Stores, spares and loose tools 19 80,622,598 80,723,129
Stock in trade 20 565,440,498 600,447,470
Trade debts 21 96,582,970 100,053,918
Advances, deposits, prepayments and other receivables 22 47,862,112 42,602,914
Current taxa�on 23 11,797,262 12,329,835
Cash and bank balances 24 2,501,841 2,221,944
804,807,281 838,379,210
TOTAL ASSETS 1,716,049,751 1,795,551,860
The annexed notes 1 to 47 form an integral part of these financial statements.
22
FOR THE YEAR ENDED JUNE 30, 2019
STATEMENT OF PROFIT OR LOSS
Note 2019 2018
Rupees Rupees
Sales - net 25 111,744,649 1,912,527,751
Cost of sales 26 (266,726,738) (2,154,985,019)
Gross loss (154,982,089) (242,457,268)
Selling and distribu�on expenses 27 (1,747,768) (9,390,771)
Administra�ve and general expenses 28 (27,470,640) (51,539,070)
(29,218,408) (60,929,841)
(184,200,497)
Other income 29 9,251,173 2,531,232
Opera�ng loss (174,949,324) (300,855,877)
Finance cost 30 (117,583,487) (83,057,164)
No�onal interest 9.3 (36,015,720) 12,182,900
Other charges 31 (31,031) (1,050,410)
Loss before taxa�on (328,579,562) (372,780,551)
Taxa�on 32 12,802,450 (25,160,794)
Loss a�er taxa�on (315,777,112) (397,941,345)
Loss per share - basic and diluted 33 (35.99) (45.35)
The annexed notes 1 to 47 form an integral part of these financial statements.
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
MIAN YOUSAF SALAHUDDIN
Director
MIAN IQBAL SALAHUDDIN
Chief Execu�ve
HASSAN SHAHNAWAZ
Chief Financial OfficerLahore Date : October 04, 2019
23
FOR THE YEAR ENDED JUNE 30, 2019
STATEMENT OF COMPREHENSIVE INCOME
Note 2019 2018
Rupees Rupees
Items that may be reclassified subsequently to profit or loss - -
Items that will not be reclassified to profit or loss
Remeasurements of defined benefit obliga�on - (5,486,071)
Deferred tax on remeasurements of defined benefit obliga�on 12.1 - 1,590,961
Deferred tax adjustment on surplus on revalua�on of 8
property, plant and equipment a�ributable to changes in tax rates - 1,186,964
- (2,708,146)
Other comprehensive loss - (2,708,146)
Loss a�er taxa�on (315,777,112) (397,941,345)
Total comprehensive loss (315,777,112) (400,649,491)
The annexed notes 1 to 47 form an integral part of these financial statements.
MIAN YOUSAF SALAHUDDIN
Director
MIAN IQBAL SALAHUDDIN
Chief Execu�ve
HASSAN SHAHNAWAZ
Chief Financial OfficerLahore Date : October 04, 2019
22
FOR THE YEAR ENDED JUNE 30, 2019
STATEMENT OF PROFIT OR LOSS
Note 2019 2018
Rupees Rupees
Sales - net 25 111,744,649 1,912,527,751
Cost of sales 26 (266,726,738) (2,154,985,019)
Gross loss (154,982,089) (242,457,268)
Selling and distribu�on expenses 27 (1,747,768) (9,390,771)
Administra�ve and general expenses 28 (27,470,640) (51,539,070)
(29,218,408) (60,929,841)
(184,200,497)
Other income 29 9,251,173 2,531,232
Opera�ng loss (174,949,324) (300,855,877)
Finance cost 30 (117,583,487) (83,057,164)
No�onal interest 9.3 (36,015,720) 12,182,900
Other charges 31 (31,031) (1,050,410)
Loss before taxa�on (328,579,562) (372,780,551)
Taxa�on 32 12,802,450 (25,160,794)
Loss a�er taxa�on (315,777,112) (397,941,345)
Loss per share - basic and diluted 33 (35.99) (45.35)
The annexed notes 1 to 47 form an integral part of these financial statements.
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
MIAN YOUSAF SALAHUDDIN
Director
MIAN IQBAL SALAHUDDIN
Chief Execu�ve
HASSAN SHAHNAWAZ
Chief Financial OfficerLahore Date : October 04, 2019
23
FOR THE YEAR ENDED JUNE 30, 2019
STATEMENT OF COMPREHENSIVE INCOME
Note 2019 2018
Rupees Rupees
Items that may be reclassified subsequently to profit or loss - -
Items that will not be reclassified to profit or loss
Remeasurements of defined benefit obliga�on - (5,486,071)
Deferred tax on remeasurements of defined benefit obliga�on 12.1 - 1,590,961
Deferred tax adjustment on surplus on revalua�on of 8
property, plant and equipment a�ributable to changes in tax rates - 1,186,964
- (2,708,146)
Other comprehensive loss - (2,708,146)
Loss a�er taxa�on (315,777,112) (397,941,345)
Total comprehensive loss (315,777,112) (400,649,491)
The annexed notes 1 to 47 form an integral part of these financial statements.
MIAN YOUSAF SALAHUDDIN
Director
MIAN IQBAL SALAHUDDIN
Chief Execu�ve
HASSAN SHAHNAWAZ
Chief Financial OfficerLahore Date : October 04, 2019
24
FOR THE YEAR ENDED JUNE 30, 2019
STATEMENT OF CASH FLOWS
Note 2019 2018
Rupees Rupees
CASH FLOW FROM OPERATING ACTIVITIES
Cash used in opera�ons 34 (51,927,941) (49,020,728)
Payments for:
Employees re�rement benefits (268,670) (17,511,702)
Interest/markup/profit on borrowings - (39,962,970)
Income tax (864,235) (6,152,457)
Net cash used in opera�ng ac�vi�es (53,060,846) (112,647,857)
CASH FLOW FROM INVESTING ACTIVITIES
Capital expenditure (339,595) (5,725,730)
Proceeds from disposal of property, plant and equipment 9,664,691 875,000
Net cash generated from/(used in) inves�ng ac�vi�es 9,325,096 (4,850,730)
CASH FLOW FROM FINANCING ACTIVITIES
Repayment of long term finances - (30,833,333)
Loan form sponsors obtained 45,000,000 140,000,000
Net (decrease)/increase in short term borrowings (984,353) 4,915,185
Net cash generated from financing ac�vi�es 44,015,647 114,081,852
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 279,897 (3,416,735)
CASH AND CASH EQUIVALENTS AS AT BEGINNING OF THE YEAR 2,221,944 5,638,679
CASH AND CASH EQUIVALENTS AS AT END OF THE YEAR 35 2,501,841 2,221,944
The annexed notes 1 to 47 form an integral part of these financial statements.
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
MIAN YOUSAF SALAHUDDIN
Director
MIAN IQBAL SALAHUDDIN
Chief Execu�ve
HASSAN SHAHNAWAZ
Chief Financial OfficerLahore Date : October 04, 2019
25
FOR THE YEAR ENDED JUNE 30, 2019STATEMENT OF CHANGES IN EQUITY
Share capital Capital reserve Revenue reserves
Surplus on
Issuedrevalua�on of property,
subscribed and plant and Accumulated Total
paid-up capital equipment losses equity
Note Rupees Rupees Rupees Rupees
Balance as at July 01, 2017 87,750,000 230,269,856 (343,634,499) (25,614,643)
Comprehensive loss
Loss a�er taxa�on - - (397,941,345) (397,941,345)
Other comprehensive loss - 1,186,964 (3,895,110) (2,708,146)
Total comprehensive loss - 1,186,964 (401,836,455) (400,649,491)
Incremental deprecia�on - (4,492,240) 4,492,240 -
Transac�on with owners - - - -
Balance as at June 30, 2018 87,750,000 226,964,580 (740,978,714) (426,264,134)
Balance as at July 01, 2018 87,750,000 226,964,580 (740,978,714) (426,264,134)
Comprehensive loss
Loss a�er taxa�on - - (315,777,112) (315,777,112)
Other comprehensive loss - - - -
Total comprehensive loss - - (315,777,112) (315,777,112)
Incremental deprecia�on - (4,348,472) 4,348,472 -
Transac�on with owners - - - -
Balance as at June 30, 2019 87,750,000 222,616,108 (1,052,407,354) (742,041,246)
The annexed notes 1 to 47 form an integral part of these financial statements.
MIAN YOUSAF SALAHUDDIN
Director
MIAN IQBAL SALAHUDDIN
Chief Execu�ve
HASSAN SHAHNAWAZ
Chief Financial OfficerLahore Date : October 04, 2019
24
FOR THE YEAR ENDED JUNE 30, 2019
STATEMENT OF CASH FLOWS
Note 2019 2018
Rupees Rupees
CASH FLOW FROM OPERATING ACTIVITIES
Cash used in opera�ons 34 (51,927,941) (49,020,728)
Payments for:
Employees re�rement benefits (268,670) (17,511,702)
Interest/markup/profit on borrowings - (39,962,970)
Income tax (864,235) (6,152,457)
Net cash used in opera�ng ac�vi�es (53,060,846) (112,647,857)
CASH FLOW FROM INVESTING ACTIVITIES
Capital expenditure (339,595) (5,725,730)
Proceeds from disposal of property, plant and equipment 9,664,691 875,000
Net cash generated from/(used in) inves�ng ac�vi�es 9,325,096 (4,850,730)
CASH FLOW FROM FINANCING ACTIVITIES
Repayment of long term finances - (30,833,333)
Loan form sponsors obtained 45,000,000 140,000,000
Net (decrease)/increase in short term borrowings (984,353) 4,915,185
Net cash generated from financing ac�vi�es 44,015,647 114,081,852
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 279,897 (3,416,735)
CASH AND CASH EQUIVALENTS AS AT BEGINNING OF THE YEAR 2,221,944 5,638,679
CASH AND CASH EQUIVALENTS AS AT END OF THE YEAR 35 2,501,841 2,221,944
The annexed notes 1 to 47 form an integral part of these financial statements.
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
MIAN YOUSAF SALAHUDDIN
Director
MIAN IQBAL SALAHUDDIN
Chief Execu�ve
HASSAN SHAHNAWAZ
Chief Financial OfficerLahore Date : October 04, 2019
25
FOR THE YEAR ENDED JUNE 30, 2019STATEMENT OF CHANGES IN EQUITY
Share capital Capital reserve Revenue reserves
Surplus on
Issuedrevalua�on of property,
subscribed and plant and Accumulated Total
paid-up capital equipment losses equity
Note Rupees Rupees Rupees Rupees
Balance as at July 01, 2017 87,750,000 230,269,856 (343,634,499) (25,614,643)
Comprehensive loss
Loss a�er taxa�on - - (397,941,345) (397,941,345)
Other comprehensive loss - 1,186,964 (3,895,110) (2,708,146)
Total comprehensive loss - 1,186,964 (401,836,455) (400,649,491)
Incremental deprecia�on - (4,492,240) 4,492,240 -
Transac�on with owners - - - -
Balance as at June 30, 2018 87,750,000 226,964,580 (740,978,714) (426,264,134)
Balance as at July 01, 2018 87,750,000 226,964,580 (740,978,714) (426,264,134)
Comprehensive loss
Loss a�er taxa�on - - (315,777,112) (315,777,112)
Other comprehensive loss - - - -
Total comprehensive loss - - (315,777,112) (315,777,112)
Incremental deprecia�on - (4,348,472) 4,348,472 -
Transac�on with owners - - - -
Balance as at June 30, 2019 87,750,000 222,616,108 (1,052,407,354) (742,041,246)
The annexed notes 1 to 47 form an integral part of these financial statements.
MIAN YOUSAF SALAHUDDIN
Director
MIAN IQBAL SALAHUDDIN
Chief Execu�ve
HASSAN SHAHNAWAZ
Chief Financial OfficerLahore Date : October 04, 2019
26
FOR THE YEAR ENDED JUNE 30, 2019
NOTES TO THE FINANCIAL STATEMENTS
1 REPORTING ENTITY
2 BASIS OF PREPARATION
2.1 Statement of compliance
-
-
-
2.2 Appropriateness of the going concern assump�on
(a)
(b)
2.3 Basis of measurement
2.4 Cri�cal accoun�ng judgements and key sources of es�ma�on uncertainty
Interna�onal Financial Repor�ng Standards ['IFRS'] issued by the Interna�onal Accoun�ng Standards Board [IASB] as no�fied under the
Companies Act, 2017;
Islamic Financial Accoun�ng Standards ['IFAS'] issued by Ins�tute of Chartered Accountants of Pakistan as no�fied under the Companies Act,
2017; and
Pakistan Stock Exchange has placed the Company on defulter segment during the year with effect from Feburary 07, 2019.
The prepara�on of financial statements requires management to make judgments, es�mates and assump�ons that affect the applica�on of
accoun�ng policies and the reported amounts of assets, liabili�es, income and expenses. The es�mates and associated assump�ons and judgments
are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the result of which forms
the basis of making judgments about carrying values of assets and liabili�es that are not readily apparent from other sources. Subsequently, actual
results may differ from these es�mates. Es�mates and underlying assump�ons are reviewed on an ongoing basis. Revisions to accoun�ng es�mates
are recognized in the period in which the es�mate is revised and in any future periods affected.
Sally Tex�le Mills Limited ['the Company'] is incorporated in Pakistan as a Public Limited Company under the Companies Ordinance, 1984 and is
listed on Pakistan Stock Exchange. The Company is a spinning unit engaged in the manufacture and sale of yarn. The registered office of the
Company is situated at 4 F, Gulberg II, Lahore. The manufacturing facility, including the power genera�on unit, is located at Joharabad District
Khushab in the Province of Punjab.
These financial statements have been prepared in accordance with the accoun�ng and repor�ng standards as applicable in Pakistan. The accoun�ng
and repor�ng standards applicable in Pakistan comprise:
Provisions of and direc�ves issued under the Companies Act, 2017.
Where provisions of and direc�ves issued under the Companies Act, 2017 differ from the IFRS, the provisions of and direc�ves issued under the
Companies Act, 2017 have been followed.
These financial statements have been prepared under the historical cost conven�on except for employee re�rement benefits liabili�es measured at
present value and certain financial instruments measured at fair value/amor�zed cost. In these financial statements, except for the amounts
reflected in the statement of cash flow, all transac�ons have been accounted for on accrual basis.
As a result, the Company has incurred gross loss of Rs. 154.982 million and loss a�er taxa�on of Rs. 315.777 million during the year ended June 30,
2019. As at June 30, 2019, the Company has accumulated losses of Rs. 1,052.407 million as at the repor�ng date. Its current liabili�es exceed its
current assets by Rs. 743.203 million. These factors raise doubts about the Company's ability to con�nue as a going concern. However, these
financial statements have been prepared on going concern basis based on the following:
The Company has been facing opera�onal losses due to decrease in selling prices in local as well as interna�onal markets, the on-going power
crises, dumping of Indian yarn at low prices along with other factors, including economic instability and unfaviourbale tex�le policy of the
Government, affec�ng the tex�le industry. The Company has not been able to u�lize its produc�on capacity at an op�mum level due to which the
desired profitability remained unachieved.
Management is op�mis�c that the government will ban the dumping of Indian yarn in our local markets to help the local industry. Meanwhile
the tex�le sector, through APTMA forum has also forwarded a pe��on to impose an�-dumping and an�-subsidy duty on Indian yarn.
The Company has con�nued financial support of its sponsors in the form of interest free loans. During the year, the sponsors provided
financial support amoun�ng to Rs. 45 million in the form of long term interest free loans.
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
27
2.5 Func�onal currency
(j) Net realizable values of stock in trade (see note 6.4)
The company es�mates net realizable values of its stock in trade as the es�mated selling price in the ordinary course of business less
es�mated costs of comple�on and es�mated costs necessary to make the sale.
2.4.2 Key sources of es�ma�on uncertainty
There are no significant es�ma�on uncertaini�es as at the repor�ng date.
(f) Expected credit losses and impairment of financial assets (see note 6.20.1)
The Company recognizes a loss allowance for expected credit losses on financial assets carried at amor�zed cost on date of inital recogni�on.
The amount of expected credit losses is updated on each repor�ng date to reflect the changes in credit risk since ini�al recogni�on of the
respec�ve financial asset. Es�ma�ng expected credit losses and changes there in requires taking into account qualita�ve and quan�ta�ve
forward looking informa�on.
(g) Recoverable amount and impairment of non-financial assets (see note 6.20.2)
The management of the Company reviews carrying amounts of its non-financial assets for possible impairment and makes formal es�mates of
recoverable amount if there is any such indica�on.
These financial statements have been prepared in Pak Rupees which is the Company's func�onal currency.
2.4.1 Cri�cal accoun�ng judgements
Judgments made by management in the applica�on of accoun�ng and repor�ng standards that have significant effect on the financial statements
and es�mates with a risk of material adjustment in subsequent years are as follows:
(a) Business model assessment (see note 6.6.2)
The Company classifies its financial assets on the basis of the Company's business model for managing the financial assets and the contractual
cash flow characteris�cs of the financial asset. The Company determines the business model at a level that reflects how financial assets are
managed to achieve a par�cular business objec�ve. This assessment includes judgement reflec�ng all relevant evidence including how the
performance of the assets is evaluated and their performance measured, the risks that affect the performance of the assets and how these
are managed.
(b) Deprecia�on method, rates and useful lives of opera�ng fixed assets (see note 6.1.1)
The Company reassesses useful lives, deprecia�on method and rates for each item of property and equipment annually by considering
expected pa�ern of economic benefits that the Company expects to derive from that item.
(c) Amor�za�on method, rates and useful lives of intangible assets (see note 6.1.1)
The management of the Company reviews carrying amounts of its assets for possible impairment and makes formal es�mates of recoverable
amount if there is any such indica�on.
(d) Taxa�on (see note 6.15)
The Company takes into account the current income tax law and decisions taken by appellate and other relevant legal forums while es�ma�ng
its provision for current tax. Provision for deferred tax is es�mated a�er taking into account historical and expected future turnover and profit
trends and their taxability under the current tax law.
(e) Provisions (see note 6.10)
Provisions are based on best es�mate of the expenditure required to se�le the present obliga�on at the repor�ng date, that is, the amount
that the Company would ra�onally pay to se�le the obliga�on at the repor�ng date or to transfer it to a third party.
(h) Obliga�on under defined benefit plan (see note 6.5)
The Company's obliga�on under the defined benefit plan is based on assump�ons of future outcomes, the principal ones being in respect of
increases in remunera�on, remaining working lives of employees and discount rates to be used to determine present value of defined benefit
obliga�on. These assump�ons are determined periodically by independent actuaries.
(i) Revalua�on of property, plant and equipment (see note 6.2)
Revalua�on of property, plant and equipment is carried out by independent professional valuers. Revalued amounts of non-depreciable items
are determined by reference to local market values and that of depreciable items are determined by reference to present depreciated
replacement values.
26
FOR THE YEAR ENDED JUNE 30, 2019
NOTES TO THE FINANCIAL STATEMENTS
1 REPORTING ENTITY
2 BASIS OF PREPARATION
2.1 Statement of compliance
-
-
-
2.2 Appropriateness of the going concern assump�on
(a)
(b)
2.3 Basis of measurement
2.4 Cri�cal accoun�ng judgements and key sources of es�ma�on uncertainty
Interna�onal Financial Repor�ng Standards ['IFRS'] issued by the Interna�onal Accoun�ng Standards Board [IASB] as no�fied under the
Companies Act, 2017;
Islamic Financial Accoun�ng Standards ['IFAS'] issued by Ins�tute of Chartered Accountants of Pakistan as no�fied under the Companies Act,
2017; and
Pakistan Stock Exchange has placed the Company on defulter segment during the year with effect from Feburary 07, 2019.
The prepara�on of financial statements requires management to make judgments, es�mates and assump�ons that affect the applica�on of
accoun�ng policies and the reported amounts of assets, liabili�es, income and expenses. The es�mates and associated assump�ons and judgments
are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the result of which forms
the basis of making judgments about carrying values of assets and liabili�es that are not readily apparent from other sources. Subsequently, actual
results may differ from these es�mates. Es�mates and underlying assump�ons are reviewed on an ongoing basis. Revisions to accoun�ng es�mates
are recognized in the period in which the es�mate is revised and in any future periods affected.
Sally Tex�le Mills Limited ['the Company'] is incorporated in Pakistan as a Public Limited Company under the Companies Ordinance, 1984 and is
listed on Pakistan Stock Exchange. The Company is a spinning unit engaged in the manufacture and sale of yarn. The registered office of the
Company is situated at 4 F, Gulberg II, Lahore. The manufacturing facility, including the power genera�on unit, is located at Joharabad District
Khushab in the Province of Punjab.
These financial statements have been prepared in accordance with the accoun�ng and repor�ng standards as applicable in Pakistan. The accoun�ng
and repor�ng standards applicable in Pakistan comprise:
Provisions of and direc�ves issued under the Companies Act, 2017.
Where provisions of and direc�ves issued under the Companies Act, 2017 differ from the IFRS, the provisions of and direc�ves issued under the
Companies Act, 2017 have been followed.
These financial statements have been prepared under the historical cost conven�on except for employee re�rement benefits liabili�es measured at
present value and certain financial instruments measured at fair value/amor�zed cost. In these financial statements, except for the amounts
reflected in the statement of cash flow, all transac�ons have been accounted for on accrual basis.
As a result, the Company has incurred gross loss of Rs. 154.982 million and loss a�er taxa�on of Rs. 315.777 million during the year ended June 30,
2019. As at June 30, 2019, the Company has accumulated losses of Rs. 1,052.407 million as at the repor�ng date. Its current liabili�es exceed its
current assets by Rs. 743.203 million. These factors raise doubts about the Company's ability to con�nue as a going concern. However, these
financial statements have been prepared on going concern basis based on the following:
The Company has been facing opera�onal losses due to decrease in selling prices in local as well as interna�onal markets, the on-going power
crises, dumping of Indian yarn at low prices along with other factors, including economic instability and unfaviourbale tex�le policy of the
Government, affec�ng the tex�le industry. The Company has not been able to u�lize its produc�on capacity at an op�mum level due to which the
desired profitability remained unachieved.
Management is op�mis�c that the government will ban the dumping of Indian yarn in our local markets to help the local industry. Meanwhile
the tex�le sector, through APTMA forum has also forwarded a pe��on to impose an�-dumping and an�-subsidy duty on Indian yarn.
The Company has con�nued financial support of its sponsors in the form of interest free loans. During the year, the sponsors provided
financial support amoun�ng to Rs. 45 million in the form of long term interest free loans.
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
27
2.5 Func�onal currency
(j) Net realizable values of stock in trade (see note 6.4)
The company es�mates net realizable values of its stock in trade as the es�mated selling price in the ordinary course of business less
es�mated costs of comple�on and es�mated costs necessary to make the sale.
2.4.2 Key sources of es�ma�on uncertainty
There are no significant es�ma�on uncertaini�es as at the repor�ng date.
(f) Expected credit losses and impairment of financial assets (see note 6.20.1)
The Company recognizes a loss allowance for expected credit losses on financial assets carried at amor�zed cost on date of inital recogni�on.
The amount of expected credit losses is updated on each repor�ng date to reflect the changes in credit risk since ini�al recogni�on of the
respec�ve financial asset. Es�ma�ng expected credit losses and changes there in requires taking into account qualita�ve and quan�ta�ve
forward looking informa�on.
(g) Recoverable amount and impairment of non-financial assets (see note 6.20.2)
The management of the Company reviews carrying amounts of its non-financial assets for possible impairment and makes formal es�mates of
recoverable amount if there is any such indica�on.
These financial statements have been prepared in Pak Rupees which is the Company's func�onal currency.
2.4.1 Cri�cal accoun�ng judgements
Judgments made by management in the applica�on of accoun�ng and repor�ng standards that have significant effect on the financial statements
and es�mates with a risk of material adjustment in subsequent years are as follows:
(a) Business model assessment (see note 6.6.2)
The Company classifies its financial assets on the basis of the Company's business model for managing the financial assets and the contractual
cash flow characteris�cs of the financial asset. The Company determines the business model at a level that reflects how financial assets are
managed to achieve a par�cular business objec�ve. This assessment includes judgement reflec�ng all relevant evidence including how the
performance of the assets is evaluated and their performance measured, the risks that affect the performance of the assets and how these
are managed.
(b) Deprecia�on method, rates and useful lives of opera�ng fixed assets (see note 6.1.1)
The Company reassesses useful lives, deprecia�on method and rates for each item of property and equipment annually by considering
expected pa�ern of economic benefits that the Company expects to derive from that item.
(c) Amor�za�on method, rates and useful lives of intangible assets (see note 6.1.1)
The management of the Company reviews carrying amounts of its assets for possible impairment and makes formal es�mates of recoverable
amount if there is any such indica�on.
(d) Taxa�on (see note 6.15)
The Company takes into account the current income tax law and decisions taken by appellate and other relevant legal forums while es�ma�ng
its provision for current tax. Provision for deferred tax is es�mated a�er taking into account historical and expected future turnover and profit
trends and their taxability under the current tax law.
(e) Provisions (see note 6.10)
Provisions are based on best es�mate of the expenditure required to se�le the present obliga�on at the repor�ng date, that is, the amount
that the Company would ra�onally pay to se�le the obliga�on at the repor�ng date or to transfer it to a third party.
(h) Obliga�on under defined benefit plan (see note 6.5)
The Company's obliga�on under the defined benefit plan is based on assump�ons of future outcomes, the principal ones being in respect of
increases in remunera�on, remaining working lives of employees and discount rates to be used to determine present value of defined benefit
obliga�on. These assump�ons are determined periodically by independent actuaries.
(i) Revalua�on of property, plant and equipment (see note 6.2)
Revalua�on of property, plant and equipment is carried out by independent professional valuers. Revalued amounts of non-depreciable items
are determined by reference to local market values and that of depreciable items are determined by reference to present depreciated
replacement values.
28
2.6 Date of authoriza�on for issue
These financial statements were authorized for issue on October 04, 2019 by the Board of Directors of the Company.
Despite the foregoing, the Company may make an irrevocable elec�on/designa�on at ini�al recogni�on of financial asset:
- To present subsequent changes in fair value of an equity instrument that is not held for trading nor con�ngent considera�on recognized by an
acquirer in a business combina�on in other comprehensive income and classify it as FVTOCI
- To designate a debt instrument that meets the amor�zed cost or FVTOCI criteria as measured art FVTPL if doing so eliminates or significantly
reduces a measurement or recogni�on inconsistency.
IFRS 9 introduces new requirements for the classifica�on and measurement of financial assets and financial liabili�es, impairment of financial assets
and general hedge accoun�ng. The Company has applied IFRS 9 in accordance transi�ons provision set out in the standard.
The date of ini�al applica�on of IFRS 9 (the date on which the Company has assessed its exis�ng financial assets and financial liabili�es in terms of
the requirements of IFRS 9) is June 30, 2019. Accordingly, the Company has applied the requirements IFRS 9 to instruments that con�nue to be
recognized as at June 30, 2019. Compara�ve amounts in rela�on to instruments that con�nue to be recognized as at June 30, 2019 have not been
restated as allowed by IFRS 9.
The classifica�on and measurement requirements for financial liabili�es have been substan�ally carried forward from IAS 39. All recognized
financial assets that are within the scope of IFRS 9 are required to be measured subsequently at amor�zed cost or fair value on the basis of the
Company's business model for managing the financial assets and the contractual cash flow characteris�cs of the financial assets. Specifically:
- Financial assets that are held within a business model whose objec�ve is to hold financial assets in order to collect contractual cashflows and
the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding are subsequently measured at amor�zed cost and accordingly classified as 'financial assets at amor�zed cost'
- Financial assets that are held within a business model whose objec�ve is achieved by both collec�ng contractual cashflows and selling
financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding subsequently measured at fair value through other comprehensive income and accordingly
classified as 'financial assets at fair value through other comprehensive income [FVTOCI]'
- All other financial instruments are subsequently measured at fair value through profit or loss and accordingly classified as 'financial assets at
fair value through profit or loss [FVTPL]'
3.1 IFRS 9 - Financial Instruments
Classifica�on and measurement
When a financial asset measured at FVTOCI is derecognized, the cumula�ve gain or loss recognized in other comprehensive income is reclassified to
profit or loss as a reclassifica�on adjustment except for equity instruments measured at FVTOCI, where the cumula�ve gain or loss previously
recognized in other comprehensive income is subsequently transferred to accumulated profits.
The Company has reviewed and assessed the exis�ng financial assets as at June 30, 2019 based on facts and circumstances that existed at that date
and concluded that ini�al applica�on of IFRS 9 has had the following impact on the Company's financial assets as regards their classifica�on and
measurement.
3 NEW AND REVISED STANDARDS, INTERPRETATIONS AND AMENDMENTS EFFECTIVE DURING THE YEAR
The following new and revised standards, interpreta�ons and amendments are effec�ve in the current year but are either not relevant to the
Company or their applica�on does not have any material impact on the financial statements of the Company other than presenta�on and
disclosures, except as stated otherwise.
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
29
Impairment of financial assets
3.3 Clarifica�ons to IFRS 15 - Revenue from Contracts with Customers
3.4 IFRIC 22 - Foreign Currency Transac�ons and Advances Considera�on
3.5 Classifica�on and Measurement of Share-based Payment Transac�ons (Amendments to IFRS 2 - Share-based Payment)
IFRS 2 - Share-based Payment have been amended to clarify the standard in rela�on to the accoun�ng for cash-se�led share-based payment
transac�ons that include a performance condi�on, the classifica�on of share-based payment transac�ons with net se�lement features, and the
accoun�ng for modifica�ons of share-based payment transac�ons from cash-se�led to equity-se�led.
IFRS 15 - Revenue from Contracts with Customers' supersedes IAS 11 - Construc�on Contracts, IAS 18 - Revenue and related interpreta�ons and it
applies to all revenue arising from contracts with customers, unless those contracts are in the scope of other standards. The new standard
establishes a five-step model to account for revenue arising from contracts with customers. Under IFRS 15, revenue is recognised at an amount that
reflects the considera�on to which an en�ty expects to be en�tled in exchange for transferring goods or services to a customer. The standard
requires en��es to exercise judgment, taking into considera�on all of the relevant facts and circumstances when applying each step of the model to
contracts with their customers. The Company has reviewed it exis�ng accoun�ng policy for revenue recogni�on in light of the requirements of IFRS
15 and has concluded that it is already in line with the requirements of the new standard and thus no change in accoun�ng policy or to the amounts
reported in these financial statements is required.
IFRS 15 - Revenue from Contracts with Customers have been amended to clarify three aspects of the standard (iden�fying performance obliga�ons,
principal versus agent considera�ons, and licensing) and to provide some transi�on relief for modified contracts and completed contracts.
The interpreta�on addresses the determina�on of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates, when
there is uncertainty over income tax treatments under IAS 12. It specifically considers:
3.2 IFRS 15 - Revenue from Contracts with Customers
In rela�on to the impairment of financial assets, IFRS 9 requires an expected credit loss model as opposed to an incurred credit loss model under IAS
39. The expected credit loss model requires the Company to account for expected credit losses and changes in those expected credit losses at each
repor�ng date to reflect changes in credit risk since ini�al recogni�on of the financial assets. Therefore, it is no longer necessary for a credit loss to
have occurred before the same is recognized.
IFRS 9 requires the Company to measure the loss allowance for financial instrument at an amount equal to life�me expected credit losses if the
credit risk has increased significantly since ini�al recogni�on, or if the financial instrument is a purchased or originated credit impaired financial
asset. However, if the credit risk on a financial instrument has not increased significantly since ini�al recogni�on, except for a purchased or
originated credit-impaired financial asset, the Company is required to measure the loss allowance for that financial asset at an amount equal to 12-
months expected credit loss. IFRS also requires a simplified approach for measuring the loss allowance at an amount equal to life�me expected
credit losses for trade receivables, contract assets and lease receivables in certain circumstances.
-
-
-
-
Whether tax treatments should be considered collec�vely
Assump�ons for taxa�on authori�es' examina�ons
The determina�on of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates
The effect of changes in facts and circumstances
Loan from sponsors Financial liabili�es at amor�zed cost Financial liabili�es at amor�zed cost
Long term finances Financial liabili�es at amor�zed cost Financial liabili�es at amor�zed cost
Short term borrowings Financial liabili�es at amor�zed cost Financial liabili�es at amor�zed cost
Accrued interest/markup/profit Financial liabili�es at amor�zed cost Financial liabili�es at amor�zed cost
Trade creditors Financial liabili�es at amor�zed cost Financial liabili�es at amor�zed cost
Accrued liabili�es Financial liabili�es at amor�zed cost Financial liabili�es at amor�zed cost
Unclaimed dividend Financial liabili�es at amor�zed cost Financial liabili�es at amor�zed cost
Long term deposits Loans and receivables Financial assets at amor�zed cost
Trade debts Loans and receivables Financial assets at amor�zed cost
Advances to employees Loans and receivables Financial assets at amor�zed cost
Security deposits Loans and receivables Financial assets at amor�zed cost
Insurance claims receivable Loans and receivables Financial assets at amor�zed cost
Bank balances Loans and receivables Financial assets at amor�zed cost
IAS 39 IFRS 9
28
2.6 Date of authoriza�on for issue
These financial statements were authorized for issue on October 04, 2019 by the Board of Directors of the Company.
Despite the foregoing, the Company may make an irrevocable elec�on/designa�on at ini�al recogni�on of financial asset:
- To present subsequent changes in fair value of an equity instrument that is not held for trading nor con�ngent considera�on recognized by an
acquirer in a business combina�on in other comprehensive income and classify it as FVTOCI
- To designate a debt instrument that meets the amor�zed cost or FVTOCI criteria as measured art FVTPL if doing so eliminates or significantly
reduces a measurement or recogni�on inconsistency.
IFRS 9 introduces new requirements for the classifica�on and measurement of financial assets and financial liabili�es, impairment of financial assets
and general hedge accoun�ng. The Company has applied IFRS 9 in accordance transi�ons provision set out in the standard.
The date of ini�al applica�on of IFRS 9 (the date on which the Company has assessed its exis�ng financial assets and financial liabili�es in terms of
the requirements of IFRS 9) is June 30, 2019. Accordingly, the Company has applied the requirements IFRS 9 to instruments that con�nue to be
recognized as at June 30, 2019. Compara�ve amounts in rela�on to instruments that con�nue to be recognized as at June 30, 2019 have not been
restated as allowed by IFRS 9.
The classifica�on and measurement requirements for financial liabili�es have been substan�ally carried forward from IAS 39. All recognized
financial assets that are within the scope of IFRS 9 are required to be measured subsequently at amor�zed cost or fair value on the basis of the
Company's business model for managing the financial assets and the contractual cash flow characteris�cs of the financial assets. Specifically:
- Financial assets that are held within a business model whose objec�ve is to hold financial assets in order to collect contractual cashflows and
the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding are subsequently measured at amor�zed cost and accordingly classified as 'financial assets at amor�zed cost'
- Financial assets that are held within a business model whose objec�ve is achieved by both collec�ng contractual cashflows and selling
financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding subsequently measured at fair value through other comprehensive income and accordingly
classified as 'financial assets at fair value through other comprehensive income [FVTOCI]'
- All other financial instruments are subsequently measured at fair value through profit or loss and accordingly classified as 'financial assets at
fair value through profit or loss [FVTPL]'
3.1 IFRS 9 - Financial Instruments
Classifica�on and measurement
When a financial asset measured at FVTOCI is derecognized, the cumula�ve gain or loss recognized in other comprehensive income is reclassified to
profit or loss as a reclassifica�on adjustment except for equity instruments measured at FVTOCI, where the cumula�ve gain or loss previously
recognized in other comprehensive income is subsequently transferred to accumulated profits.
The Company has reviewed and assessed the exis�ng financial assets as at June 30, 2019 based on facts and circumstances that existed at that date
and concluded that ini�al applica�on of IFRS 9 has had the following impact on the Company's financial assets as regards their classifica�on and
measurement.
3 NEW AND REVISED STANDARDS, INTERPRETATIONS AND AMENDMENTS EFFECTIVE DURING THE YEAR
The following new and revised standards, interpreta�ons and amendments are effec�ve in the current year but are either not relevant to the
Company or their applica�on does not have any material impact on the financial statements of the Company other than presenta�on and
disclosures, except as stated otherwise.
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
29
Impairment of financial assets
3.3 Clarifica�ons to IFRS 15 - Revenue from Contracts with Customers
3.4 IFRIC 22 - Foreign Currency Transac�ons and Advances Considera�on
3.5 Classifica�on and Measurement of Share-based Payment Transac�ons (Amendments to IFRS 2 - Share-based Payment)
IFRS 2 - Share-based Payment have been amended to clarify the standard in rela�on to the accoun�ng for cash-se�led share-based payment
transac�ons that include a performance condi�on, the classifica�on of share-based payment transac�ons with net se�lement features, and the
accoun�ng for modifica�ons of share-based payment transac�ons from cash-se�led to equity-se�led.
IFRS 15 - Revenue from Contracts with Customers' supersedes IAS 11 - Construc�on Contracts, IAS 18 - Revenue and related interpreta�ons and it
applies to all revenue arising from contracts with customers, unless those contracts are in the scope of other standards. The new standard
establishes a five-step model to account for revenue arising from contracts with customers. Under IFRS 15, revenue is recognised at an amount that
reflects the considera�on to which an en�ty expects to be en�tled in exchange for transferring goods or services to a customer. The standard
requires en��es to exercise judgment, taking into considera�on all of the relevant facts and circumstances when applying each step of the model to
contracts with their customers. The Company has reviewed it exis�ng accoun�ng policy for revenue recogni�on in light of the requirements of IFRS
15 and has concluded that it is already in line with the requirements of the new standard and thus no change in accoun�ng policy or to the amounts
reported in these financial statements is required.
IFRS 15 - Revenue from Contracts with Customers have been amended to clarify three aspects of the standard (iden�fying performance obliga�ons,
principal versus agent considera�ons, and licensing) and to provide some transi�on relief for modified contracts and completed contracts.
The interpreta�on addresses the determina�on of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates, when
there is uncertainty over income tax treatments under IAS 12. It specifically considers:
3.2 IFRS 15 - Revenue from Contracts with Customers
In rela�on to the impairment of financial assets, IFRS 9 requires an expected credit loss model as opposed to an incurred credit loss model under IAS
39. The expected credit loss model requires the Company to account for expected credit losses and changes in those expected credit losses at each
repor�ng date to reflect changes in credit risk since ini�al recogni�on of the financial assets. Therefore, it is no longer necessary for a credit loss to
have occurred before the same is recognized.
IFRS 9 requires the Company to measure the loss allowance for financial instrument at an amount equal to life�me expected credit losses if the
credit risk has increased significantly since ini�al recogni�on, or if the financial instrument is a purchased or originated credit impaired financial
asset. However, if the credit risk on a financial instrument has not increased significantly since ini�al recogni�on, except for a purchased or
originated credit-impaired financial asset, the Company is required to measure the loss allowance for that financial asset at an amount equal to 12-
months expected credit loss. IFRS also requires a simplified approach for measuring the loss allowance at an amount equal to life�me expected
credit losses for trade receivables, contract assets and lease receivables in certain circumstances.
-
-
-
-
Whether tax treatments should be considered collec�vely
Assump�ons for taxa�on authori�es' examina�ons
The determina�on of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates
The effect of changes in facts and circumstances
Loan from sponsors Financial liabili�es at amor�zed cost Financial liabili�es at amor�zed cost
Long term finances Financial liabili�es at amor�zed cost Financial liabili�es at amor�zed cost
Short term borrowings Financial liabili�es at amor�zed cost Financial liabili�es at amor�zed cost
Accrued interest/markup/profit Financial liabili�es at amor�zed cost Financial liabili�es at amor�zed cost
Trade creditors Financial liabili�es at amor�zed cost Financial liabili�es at amor�zed cost
Accrued liabili�es Financial liabili�es at amor�zed cost Financial liabili�es at amor�zed cost
Unclaimed dividend Financial liabili�es at amor�zed cost Financial liabili�es at amor�zed cost
Long term deposits Loans and receivables Financial assets at amor�zed cost
Trade debts Loans and receivables Financial assets at amor�zed cost
Advances to employees Loans and receivables Financial assets at amor�zed cost
Security deposits Loans and receivables Financial assets at amor�zed cost
Insurance claims receivable Loans and receivables Financial assets at amor�zed cost
Bank balances Loans and receivables Financial assets at amor�zed cost
IAS 39 IFRS 9
30
3.7 Transfers of Investment Property (Amendments to IAS 40 - Investment Property)
3.6 Applying IFRS 9 - Financial Instruments with IFRS 4 - Insurance Contracts (Amendments to IFRS 4 - Insurance Contracts)
IFRS 4 Insurance Contracts have been amended to provide two op�ons for en��es that issue insurance contracts within the scope of IFRS 4:
- an op�on that permits en��es to reclassify, from profit or loss to other comprehensive income, some of the income or expenses arising from
designated financial assets; this is the so-called overlay approach;
- an op�onal temporary exemp�on from applying IFRS 9 for en��es whose predominant ac�vity is issuing contracts within the scope of IFRS 4;
this is the so-called deferral approach
- The list of examples of evidence in paragraph 57(a) – (d) is now presented as a non-exhaus�ve list of examples instead of the previous
exhaus�ve list.
3.8 Annual Improvements to IFRS Standards 2014–2016 Cycle (IFRS 1 - First-�me Adop�on of Interna�onal Financial Repor�ng Standards and IAS
28 - Investments in Associates and Joint Ventures)
- IFRS 1 - Deletes the short-term exemp�ons in paragraphs E3–E7 of IFRS 1, because they have now served their intended purpose.
Annual improvements makes amendments to the following standards:
(annual periods beginning
on or a�er)
Effec�ve date
4 NEW AND REVISED STANDARDS, INTERPRETATIONS AND AMENDMENTS NOT YET EFFECTIVE.
earlyThe following standards, interpreta�ons and amendments are in issue which are not effec�ve as at the repor�ng date and have not been
adopted by the Company.
IAS 40 - Investment Property have following amendments:
The applica�on of both approaches is op�onal and an en�ty is permi�ed to stop applying them before the new insurance contracts standard is
applied.
January 01, 2019
January 01, 2021
Deferred Indefinitely
January 01, 2019
January 01, 2019
January 01, 2019
January 01, 2019
January 01, 2019
January 01, 2020
January 01, 2020
Prepayment Features with Nega�ve Compensa�on (Amendments to IFRS 9 - Financial Instruments)
Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28 - Investments in
Associates and Joint Ventures)
Annual Improvements to IFRS Standards 2015 – 2017 Cycle
IFRS 16 - Leases (2016)
IFRS 17 - Insurance contracts (2017)
Sale or contribu�on of assets between an Investor and its Associate or Joint Venture (Amendments
to IFRS 10 - Consolidated Financial Statements and IAS 28 - Investments in Associates and Joint
Ventures).
IFRIC 23 - Uncertainty over Income Tax Treatments
Plan Amendment, Curtailment or Se�lement (Amendments to IAS 19 - Employee Benefits)
Amendments to References to the Conceptual Framework in IFRS Standards
Defini�on of a Business (Amendments to IFRS 3 - Business Combina�ons)
- Paragraph 57 have been amended to state that an en�ty shall transfer a property to, or from, investment property when, and only when, there is evidence of a change in use. A change of use occurs if property meets, or ceases to meet, the defini�on of investment property. A change in management’s inten�ons for the use of a property by itself does not cons�tute evidence of a change in use.
- IAS 28 - Clarifies that the elec�on to measure at fair value through profit or loss an investment in an associate or a joint venture that is held by an en�ty that is a venture capital organisa�on, or other qualifying en�ty, is available for each investment in an associate or joint venture on an investment-by-investment basis, upon ini�al recogni�on.
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
31
January 01, 2020
IFRS 1 - First Time Adop�on of Interna�onal Financial Repor�ng Standards
IFRS 14 - Regulatory Defferal Accounts
IFRS 17 – Insurance contracts (2017)
5 CHANGE IN ACCOUNTING POLICY
Impairment of financial assets
6 SIGNIFICANT ACCOUNTING POLICIES
Effec�ve date
(annual periods beginning
on or a�er)
Previous accoun�ng policy New accoun�ng policy
The Company intends to adopt these new and revised standards, interpreta�ons and amendments on their effec�ve dates, subject to, where
required, no�fica�on by Securi�es and Exchange Commission of Pakistan under sec�on 225 of the Companies Act, 2017 regarding their adop�on.
The management an�cipates that the adop�on of the above standards, amendments and interpreta�ons in future periods, will have no material
impact on the Company's financial statements other than in presenta�on/disclosures.
The accoun�ng policies set out below have been applied consistently to all periods presented in these financial statements, except of change
referred to in note 5.
The adop�on of new and revised standards, interpreta�ons and amendments effec�ve during the year has resulted in changes to accoun�ng
policies as follows:
Defini�on of Material (Amendments to IAS 1 - First-�me Adop�on of Interna�onal Financial
Repor�ng Standards and IAS 8 - Accoun�ng Policies, Changes in Accoun�ng Es�mates and Errors)
Other than afore men�oned standards, interpreta�ons and amendments, IABS has also issued the following standards which have not been no�fied
by the Securi�es and Exchange Commission of Pakistan ['SECP']:
A financial asset is assessed at each repor�ng date to determine whether
there is any objec�ve evidence that it is impaired. Individually significant
financial assets are tested for impairment on an individual basis. The
remaining financial assets are assessed collec�vely in groups that share similar
credit risk characteris�cs. A financial asset is considered to be impaired if
objec�ve evidence indicates that one or more events have had a nega�ve
effect on the es�mated future cash flows of the asset.
An impairment loss in respect of a financial asset measured at amor�zed cost
is calculated as the difference between its carrying amount, and the present
value of the es�mated future cash flows discounted at the original effec�ve
interest rate. Impairment loss in respect of a financial asset measured at fair
value is determined by reference to that fair value. All impairment losses are
recognized in profit or loss. An impairment loss is reversed if the reversal can
be related objec�vely to an event occurring a�er the impairment loss was
recognized. An impairment loss is reversed only to the extent that the financial
asset’s carrying amount a�er the reversal does not exceed the carrying
amount that would have been determined, net of amor�za�on, if no
impairment loss had been recognized.
The Company recognizes a loss allowance for expected credit losses on
financial assets carried at amor�zed cost on date of inital recogni�on.
The amount of expected credit losses is updated on each repor�ng date
to reflect the changes in credit risk since ini�al recogni�on of the
respec�ve financial asset.
Impairment is recognized at an amount equal to life�me expected credit
losses for financial assets for which credit risk has increased significantly
since ini�al recogni�on. For financial assets for which credit risk is low,
impairment is recognized at an amount equal to twelve months'
expected credit losses, with the excep�on of trade debts, for which the
Company recognises life�me expected credit losses es�mated using
internal credit risk grading based on the Company's historical credit loss
experience, adjusted for factors that are specific to debtors, general
economic condi�ons, and an assessment for both the current as well as
the forecast direc�on of condi�ons at the repor�ng date, including �me
value of money where appropriate.
All impairment losses are recognized in profit or loss. An impairment loss
is reversed if the reversal can be related objec�vely to an event
occurring a�er the impairment loss was recognized. An impairment loss
is reversed only to the extent that the financial asset’s carrying amount
a�er the reversal does not exceed the carrying amount that would have
been determined, net of amor�za�on, if no impairment loss had been
recognized.
The Company writes off a financial asset when there is informa�on
indica�ng that the counter-party is in severe financial condi�on and
there is no realis�c prospect of recovery. Any recoveries made post
write-off are recognized in profit or loss.
30
3.7 Transfers of Investment Property (Amendments to IAS 40 - Investment Property)
3.6 Applying IFRS 9 - Financial Instruments with IFRS 4 - Insurance Contracts (Amendments to IFRS 4 - Insurance Contracts)
IFRS 4 Insurance Contracts have been amended to provide two op�ons for en��es that issue insurance contracts within the scope of IFRS 4:
- an op�on that permits en��es to reclassify, from profit or loss to other comprehensive income, some of the income or expenses arising from
designated financial assets; this is the so-called overlay approach;
- an op�onal temporary exemp�on from applying IFRS 9 for en��es whose predominant ac�vity is issuing contracts within the scope of IFRS 4;
this is the so-called deferral approach
- The list of examples of evidence in paragraph 57(a) – (d) is now presented as a non-exhaus�ve list of examples instead of the previous
exhaus�ve list.
3.8 Annual Improvements to IFRS Standards 2014–2016 Cycle (IFRS 1 - First-�me Adop�on of Interna�onal Financial Repor�ng Standards and IAS
28 - Investments in Associates and Joint Ventures)
- IFRS 1 - Deletes the short-term exemp�ons in paragraphs E3–E7 of IFRS 1, because they have now served their intended purpose.
Annual improvements makes amendments to the following standards:
(annual periods beginning
on or a�er)
Effec�ve date
4 NEW AND REVISED STANDARDS, INTERPRETATIONS AND AMENDMENTS NOT YET EFFECTIVE.
earlyThe following standards, interpreta�ons and amendments are in issue which are not effec�ve as at the repor�ng date and have not been
adopted by the Company.
IAS 40 - Investment Property have following amendments:
The applica�on of both approaches is op�onal and an en�ty is permi�ed to stop applying them before the new insurance contracts standard is
applied.
January 01, 2019
January 01, 2021
Deferred Indefinitely
January 01, 2019
January 01, 2019
January 01, 2019
January 01, 2019
January 01, 2019
January 01, 2020
January 01, 2020
Prepayment Features with Nega�ve Compensa�on (Amendments to IFRS 9 - Financial Instruments)
Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28 - Investments in
Associates and Joint Ventures)
Annual Improvements to IFRS Standards 2015 – 2017 Cycle
IFRS 16 - Leases (2016)
IFRS 17 - Insurance contracts (2017)
Sale or contribu�on of assets between an Investor and its Associate or Joint Venture (Amendments
to IFRS 10 - Consolidated Financial Statements and IAS 28 - Investments in Associates and Joint
Ventures).
IFRIC 23 - Uncertainty over Income Tax Treatments
Plan Amendment, Curtailment or Se�lement (Amendments to IAS 19 - Employee Benefits)
Amendments to References to the Conceptual Framework in IFRS Standards
Defini�on of a Business (Amendments to IFRS 3 - Business Combina�ons)
- Paragraph 57 have been amended to state that an en�ty shall transfer a property to, or from, investment property when, and only when, there is evidence of a change in use. A change of use occurs if property meets, or ceases to meet, the defini�on of investment property. A change in management’s inten�ons for the use of a property by itself does not cons�tute evidence of a change in use.
- IAS 28 - Clarifies that the elec�on to measure at fair value through profit or loss an investment in an associate or a joint venture that is held by an en�ty that is a venture capital organisa�on, or other qualifying en�ty, is available for each investment in an associate or joint venture on an investment-by-investment basis, upon ini�al recogni�on.
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
31
January 01, 2020
IFRS 1 - First Time Adop�on of Interna�onal Financial Repor�ng Standards
IFRS 14 - Regulatory Defferal Accounts
IFRS 17 – Insurance contracts (2017)
5 CHANGE IN ACCOUNTING POLICY
Impairment of financial assets
6 SIGNIFICANT ACCOUNTING POLICIES
Effec�ve date
(annual periods beginning
on or a�er)
Previous accoun�ng policy New accoun�ng policy
The Company intends to adopt these new and revised standards, interpreta�ons and amendments on their effec�ve dates, subject to, where
required, no�fica�on by Securi�es and Exchange Commission of Pakistan under sec�on 225 of the Companies Act, 2017 regarding their adop�on.
The management an�cipates that the adop�on of the above standards, amendments and interpreta�ons in future periods, will have no material
impact on the Company's financial statements other than in presenta�on/disclosures.
The accoun�ng policies set out below have been applied consistently to all periods presented in these financial statements, except of change
referred to in note 5.
The adop�on of new and revised standards, interpreta�ons and amendments effec�ve during the year has resulted in changes to accoun�ng
policies as follows:
Defini�on of Material (Amendments to IAS 1 - First-�me Adop�on of Interna�onal Financial
Repor�ng Standards and IAS 8 - Accoun�ng Policies, Changes in Accoun�ng Es�mates and Errors)
Other than afore men�oned standards, interpreta�ons and amendments, IABS has also issued the following standards which have not been no�fied
by the Securi�es and Exchange Commission of Pakistan ['SECP']:
A financial asset is assessed at each repor�ng date to determine whether
there is any objec�ve evidence that it is impaired. Individually significant
financial assets are tested for impairment on an individual basis. The
remaining financial assets are assessed collec�vely in groups that share similar
credit risk characteris�cs. A financial asset is considered to be impaired if
objec�ve evidence indicates that one or more events have had a nega�ve
effect on the es�mated future cash flows of the asset.
An impairment loss in respect of a financial asset measured at amor�zed cost
is calculated as the difference between its carrying amount, and the present
value of the es�mated future cash flows discounted at the original effec�ve
interest rate. Impairment loss in respect of a financial asset measured at fair
value is determined by reference to that fair value. All impairment losses are
recognized in profit or loss. An impairment loss is reversed if the reversal can
be related objec�vely to an event occurring a�er the impairment loss was
recognized. An impairment loss is reversed only to the extent that the financial
asset’s carrying amount a�er the reversal does not exceed the carrying
amount that would have been determined, net of amor�za�on, if no
impairment loss had been recognized.
The Company recognizes a loss allowance for expected credit losses on
financial assets carried at amor�zed cost on date of inital recogni�on.
The amount of expected credit losses is updated on each repor�ng date
to reflect the changes in credit risk since ini�al recogni�on of the
respec�ve financial asset.
Impairment is recognized at an amount equal to life�me expected credit
losses for financial assets for which credit risk has increased significantly
since ini�al recogni�on. For financial assets for which credit risk is low,
impairment is recognized at an amount equal to twelve months'
expected credit losses, with the excep�on of trade debts, for which the
Company recognises life�me expected credit losses es�mated using
internal credit risk grading based on the Company's historical credit loss
experience, adjusted for factors that are specific to debtors, general
economic condi�ons, and an assessment for both the current as well as
the forecast direc�on of condi�ons at the repor�ng date, including �me
value of money where appropriate.
All impairment losses are recognized in profit or loss. An impairment loss
is reversed if the reversal can be related objec�vely to an event
occurring a�er the impairment loss was recognized. An impairment loss
is reversed only to the extent that the financial asset’s carrying amount
a�er the reversal does not exceed the carrying amount that would have
been determined, net of amor�za�on, if no impairment loss had been
recognized.
The Company writes off a financial asset when there is informa�on
indica�ng that the counter-party is in severe financial condi�on and
there is no realis�c prospect of recovery. Any recoveries made post
write-off are recognized in profit or loss.
32
6.1 Property, plant and equipment
6.1.1 Opera�ng fixed assets
6.1.2 Capital work in progress
6.1.3 Spare parts held exclusively for capitaliza�on
6.2 Surplus / deficit arising on revalua�on of property, plant and equipment
6.3 Stores, spares and loose tools
6.4 Stock in trade
Raw material Average cost
Work in process Average manufacturing cost
Finished goods Average manufacturing cost
Stock in transit Invoice price plus related cost incurred up to the repor�ng date
These are carried at cost less accumulated impairment. Cost is determined using moving average, except for items in transit, which are carried at
invoice price plus related costs incurred upto the repor�ng date.
Major renewals and improvements to opera�ng fixed assets are recognized in the carrying amount if it is probable that the embodied future
economic benefits will flow to the Company and the cost of renewal or improvement can be measured reliably. The cost of the day-to-day servicing
of opera�ng fixed assets are recognized in profit or loss as incurred.
These are valued at lower of cost and net realizable value, with the excep�on of stock of waste which is valued at net realizable value. Cost is
determined using the following basis:
Opera�ng fixed assets are measured at cost less accumulated deprecia�on and accumulated impairment losses with the excep�on of freehold land,
which is stated at revalued amount, and buildings on freehold land, plant and machinery, electric installa�on, laboratory equipment and fire figh�ng
equipment which are carried at revalued amounts less accumulated deprecia�on. Cost comprises purchase price, including import du�es and non-
refundable purchase taxes, a�er deduc�ng trade discounts and rebates, and includes other costs directly a�ributable to the acquisi�on or
construc�on, erec�on and installa�on.
Average manufacturing cost in rela�on to work in process and finished goods consists of direct material, labour and an appropriate propor�on of
manufacturing overheads.
The Company recognizes deprecia�on in profit or loss by applying reducing balance method over the useful life of each opera�ng fixed asset using
rates specified in note 17.1 to the financial statements. Deprecia�on on addi�ons to opera�ng fixed assets is charged from the month in which the
item becomes available for use. Deprecia�on is discon�nued from the month in which it is disposed or classified as held for disposal.
An opera�ng fixed asset is de-recognized when permanently re�red from use. Any gain or loss on disposal of opera�ng fixed assets is recognized in
profit or loss.
Capital work in progress is stated at cost less iden�fied impairment loss, if any, and includes the cost of material, labour and appropriate overheads
directly rela�ng to the construc�on, erec�on or installa�on of an item of opera�ng fixed assets. These costs are transferred to opera�ng fixed assets
as and when related items become available for intended use.
Increases in the carrying amounts arising on revalua�on of property, plant and equipment are recognised, net of tax, in other comprehensive
income and accumulated in surplus on revalua�on of property, plant and equipment in share capital and reserves. To the extent that the increase
reverses a decrease previously recognised in profit or loss, the increase is first recognised in profit or loss. Decreases that reverse previous increases
of the same asset are first recognised in other comprehensive income to the extent of the remaining surplus a�ributable to the asset; all other
decreases are charged to profit or loss. Each year, the difference between deprecia�on based on the revalued carrying amount of the asset charged
to profit or loss and deprecia�on based on the asset’s original cost, net of tax, is reclassified from the surplus on revalua�on of property, plant and
equipment to accumulated profit.
These are generally held for internal use and are valued at cost. Cost is determined on the basis of moving average except for items in transit, which
are valued at invoice price plus related cost incurred up to the repor�ng date. For items which are considered obsolete, the carrying amount is
wri�en down to nil. Stores and spares held exclusively for capitaliza�on are recognized as capital work in progress.
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
33
6.5 Employee benefits
6.6 Financial instruments
6.7 Ordinary share capital
6.6.2 Classifica�on
The Company classifies its financial assets on the basis of the Company's business model for managing the financial assets and the contractual cash
flow characteris�cs of the financial asset. Financial liabili�es are classified in accordance with the substance of contractual provisions. The Company
determines the classifica�on of its financial instruments at ini�al recogni�on as follows:
6.6.1 Recogni�on
A financial instrument is recognized when the Company becomes a party to the contractual provisions of the instrument.
(a) Financial assets at amor�zed cost
These are financial assets held within a business model whose objec�ve is to hold financial assets in order to collect contractual cashflows and
the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
Net realizable value signifies the es�mated selling price in the ordinary course of business less es�mated costs of comple�on and es�mated costs
necessary to make the sale.
Short-term employee benefits
The Company recognizes the undiscounted amount of short term employee benefits to be paid in exchange for services rendered by employees as a
liability a�er deduc�ng amount already paid and as an expense in profit or loss unless it is included in the cost of inventories or property, plant and
equipment as permi�ed or required by the accoun�ng and repor�ng standards as applicable in Pakistan. If the amount paid exceeds the
undiscounted amount of benefits, the excess is recognized as an asset to the extent that the prepayment would lead to a reduc�on in future
payments or cash refund.
Post-employment benefits
The Company operates an unfunded gratuity scheme (defined benefit plan) for all its employees who have completed the minimum qualifying
service period. Liability is adjusted on each repor�ng date to cover the obliga�on and the adjustment is charged to profit or loss with the excep�on
of remeasurements which are recognized in other comprehensive income. The amount recognized on statement of financial posi�on represents the
present value of defined benefit obliga�on. The details of the scheme are referred to in note 11 to the financial statements.
6.6.3 Measurement
The par�cular measurement methods adopted are disclosed in the individual policy statements associated with each instrument.
6.6.4 De-recogni�on
A financial asset is derecognized when the Company's contractual rights to the cash flows from the financial assets expire or when the Company
transfers the financial asset to another party without retaining control of substan�ally all risks and rewards of the financial asset. A financial liability
is derecognized when the Company's obliga�ons specified in the contract expire or a discharged or cancelled.
(b) Financial liabili�es at amor�zed cost
These are financial liabili�es which are not derivates, financial guarantee contracts, commitments to provide loans at below-market interest
rate, con�ngent considera�on payable to an acquirer in a business combina�on or financial liabili�es that arise when transfer of a financial
asset does not qualify for derecogni�on.
6.6.5 Off-se�ng
A financial asset and a financial liability is offset and the net amount reported in the balance sheet if the Company has legally enforceable right to
set-off the recognized amounts and intends either to se�le on a net basis or to realize the asset and se�le the liability simultaneously.
Ordinary share capital is recognized as equity. Transac�on costs directly a�ributable to the issue of ordinary shares are recognized as deduc�on
from equity.
32
6.1 Property, plant and equipment
6.1.1 Opera�ng fixed assets
6.1.2 Capital work in progress
6.1.3 Spare parts held exclusively for capitaliza�on
6.2 Surplus / deficit arising on revalua�on of property, plant and equipment
6.3 Stores, spares and loose tools
6.4 Stock in trade
Raw material Average cost
Work in process Average manufacturing cost
Finished goods Average manufacturing cost
Stock in transit Invoice price plus related cost incurred up to the repor�ng date
These are carried at cost less accumulated impairment. Cost is determined using moving average, except for items in transit, which are carried at
invoice price plus related costs incurred upto the repor�ng date.
Major renewals and improvements to opera�ng fixed assets are recognized in the carrying amount if it is probable that the embodied future
economic benefits will flow to the Company and the cost of renewal or improvement can be measured reliably. The cost of the day-to-day servicing
of opera�ng fixed assets are recognized in profit or loss as incurred.
These are valued at lower of cost and net realizable value, with the excep�on of stock of waste which is valued at net realizable value. Cost is
determined using the following basis:
Opera�ng fixed assets are measured at cost less accumulated deprecia�on and accumulated impairment losses with the excep�on of freehold land,
which is stated at revalued amount, and buildings on freehold land, plant and machinery, electric installa�on, laboratory equipment and fire figh�ng
equipment which are carried at revalued amounts less accumulated deprecia�on. Cost comprises purchase price, including import du�es and non-
refundable purchase taxes, a�er deduc�ng trade discounts and rebates, and includes other costs directly a�ributable to the acquisi�on or
construc�on, erec�on and installa�on.
Average manufacturing cost in rela�on to work in process and finished goods consists of direct material, labour and an appropriate propor�on of
manufacturing overheads.
The Company recognizes deprecia�on in profit or loss by applying reducing balance method over the useful life of each opera�ng fixed asset using
rates specified in note 17.1 to the financial statements. Deprecia�on on addi�ons to opera�ng fixed assets is charged from the month in which the
item becomes available for use. Deprecia�on is discon�nued from the month in which it is disposed or classified as held for disposal.
An opera�ng fixed asset is de-recognized when permanently re�red from use. Any gain or loss on disposal of opera�ng fixed assets is recognized in
profit or loss.
Capital work in progress is stated at cost less iden�fied impairment loss, if any, and includes the cost of material, labour and appropriate overheads
directly rela�ng to the construc�on, erec�on or installa�on of an item of opera�ng fixed assets. These costs are transferred to opera�ng fixed assets
as and when related items become available for intended use.
Increases in the carrying amounts arising on revalua�on of property, plant and equipment are recognised, net of tax, in other comprehensive
income and accumulated in surplus on revalua�on of property, plant and equipment in share capital and reserves. To the extent that the increase
reverses a decrease previously recognised in profit or loss, the increase is first recognised in profit or loss. Decreases that reverse previous increases
of the same asset are first recognised in other comprehensive income to the extent of the remaining surplus a�ributable to the asset; all other
decreases are charged to profit or loss. Each year, the difference between deprecia�on based on the revalued carrying amount of the asset charged
to profit or loss and deprecia�on based on the asset’s original cost, net of tax, is reclassified from the surplus on revalua�on of property, plant and
equipment to accumulated profit.
These are generally held for internal use and are valued at cost. Cost is determined on the basis of moving average except for items in transit, which
are valued at invoice price plus related cost incurred up to the repor�ng date. For items which are considered obsolete, the carrying amount is
wri�en down to nil. Stores and spares held exclusively for capitaliza�on are recognized as capital work in progress.
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
33
6.5 Employee benefits
6.6 Financial instruments
6.7 Ordinary share capital
6.6.2 Classifica�on
The Company classifies its financial assets on the basis of the Company's business model for managing the financial assets and the contractual cash
flow characteris�cs of the financial asset. Financial liabili�es are classified in accordance with the substance of contractual provisions. The Company
determines the classifica�on of its financial instruments at ini�al recogni�on as follows:
6.6.1 Recogni�on
A financial instrument is recognized when the Company becomes a party to the contractual provisions of the instrument.
(a) Financial assets at amor�zed cost
These are financial assets held within a business model whose objec�ve is to hold financial assets in order to collect contractual cashflows and
the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
Net realizable value signifies the es�mated selling price in the ordinary course of business less es�mated costs of comple�on and es�mated costs
necessary to make the sale.
Short-term employee benefits
The Company recognizes the undiscounted amount of short term employee benefits to be paid in exchange for services rendered by employees as a
liability a�er deduc�ng amount already paid and as an expense in profit or loss unless it is included in the cost of inventories or property, plant and
equipment as permi�ed or required by the accoun�ng and repor�ng standards as applicable in Pakistan. If the amount paid exceeds the
undiscounted amount of benefits, the excess is recognized as an asset to the extent that the prepayment would lead to a reduc�on in future
payments or cash refund.
Post-employment benefits
The Company operates an unfunded gratuity scheme (defined benefit plan) for all its employees who have completed the minimum qualifying
service period. Liability is adjusted on each repor�ng date to cover the obliga�on and the adjustment is charged to profit or loss with the excep�on
of remeasurements which are recognized in other comprehensive income. The amount recognized on statement of financial posi�on represents the
present value of defined benefit obliga�on. The details of the scheme are referred to in note 11 to the financial statements.
6.6.3 Measurement
The par�cular measurement methods adopted are disclosed in the individual policy statements associated with each instrument.
6.6.4 De-recogni�on
A financial asset is derecognized when the Company's contractual rights to the cash flows from the financial assets expire or when the Company
transfers the financial asset to another party without retaining control of substan�ally all risks and rewards of the financial asset. A financial liability
is derecognized when the Company's obliga�ons specified in the contract expire or a discharged or cancelled.
(b) Financial liabili�es at amor�zed cost
These are financial liabili�es which are not derivates, financial guarantee contracts, commitments to provide loans at below-market interest
rate, con�ngent considera�on payable to an acquirer in a business combina�on or financial liabili�es that arise when transfer of a financial
asset does not qualify for derecogni�on.
6.6.5 Off-se�ng
A financial asset and a financial liability is offset and the net amount reported in the balance sheet if the Company has legally enforceable right to
set-off the recognized amounts and intends either to se�le on a net basis or to realize the asset and se�le the liability simultaneously.
Ordinary share capital is recognized as equity. Transac�on costs directly a�ributable to the issue of ordinary shares are recognized as deduc�on
from equity.
34
6.8 Loans and borrowings
6.9 Trade and other payables
6.10 Provisions and con�ngencies
6.11 Trade and other receivables
6.12 Revenue
6.13 Comprehensive income
6.14 Borrowing costs
6.11.1 Financial assets
These are classified as 'financial assets at amor�zed cost'. On ini�al recogni�on, these are measured at fair value at the date of transac�on, plus
a�ributable transac�on costs, except for trade debts that do not have a significant financing compenent, which are measured at undiscounted
invoice price. Subsequent to ini�al recogni�on, these are measured at amor�zed cost using the effec�ve interest method, with interest recognized
in profit or loss.
Revenue is measured based on the considera�on specified in a contract with a customer. Revenue from opera�ons of the Company are recognized
when the goods are provided, and thereby the performance obliga�ons are sa�sfied. Revenue consists of sale of yarn. The Company's contract
performance obliga�ons are fulfilled at the point in �me when the goods are dispatched to the customer. Invoices are generated and revenue is
recognised at that point in �me, as the control has been transferred to the customers
Provisions are recognized when the Company has a legal and construc�ve obliga�on as a result of past events and it is probable that ou�low of
resources embodying economic benefits will be required to se�le the obliga�on and a reliable es�mate can be made of the amount of obliga�on.
Provision is recognized at an amount that is the best es�mate of the expenditure required to se�le the present obliga�on at the repor�ng date.
Where ou�low of resources embodying economic benefits is not probable, or where a reliable es�mate of the amount of obliga�on cannot be
made, a con�ngent liability is disclosed, unless the possibility of ou�low is remote.
6.11.2 Non-financial assets
These, on ini�al recogni�on and subsequently, are measured at cost.
Comprehensive income is the change in equity resul�ng from transac�ons and other events, other than changes resul�ng from transac�ons with
shareholders in their capacity as shareholders. Total comprehensive income comprises all components of profit or loss and other comprehensive
income ('OCI'). OCI comprises items of income and expense, including reclassifica�on adjustments, that are not recognized in profit or loss as
required or permi�ed by required or permi�ed by accoun�ng and repor�ng standards as applicable in Pakistan, and is presented in 'statement of
comprehensive income.'
Borrowing costs directly a�ributable to the acquisi�on, construc�on or produc�on of qualifying assets, which are assets that necessarily take a
substan�al period of �me to get ready for their intended use or sale, are added to the cost of those assets, un�l such �me as the assets are
substan�ally ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their
expenditure on qualifying asset is deducted from the borrowing costs eligible for capitaliza�on. All other borrowing costs are recognized in profit or
loss as incurred.
6.9.2 Non-financial liabili�es
These, on ini�al recogni�on and subsequently, are measured at cost.
Loans and borrowings are classified as 'financial liabili�es at amor�zed cost'. On ini�al recogni�on, these are measured at cost, being fair value at
the date the liability is incurred, less a�ributable transac�on costs. Subsequent to ini�al recogni�on, these are measured at amor�zed cost with any
difference between cost and value at maturity recognized in the profit or loss over the period of the borrowings on an effec�ve interest basis.
6.9.1 Financial liabili�es
These are classified as 'financial liabili�es at amor�zed cost'. On ini�al recogni�on, these are measured at cost, being their fair value at the date the
liability is incurred, less a�ributable transac�on costs. Subsequent to ini�al recogni�on, these are measured at amor�zed cost using the effec�ve
interest method, with interest recognized in profit or loss.
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
35
6.15 Income tax
6.16 Earnings per share ['EPS']
6.17 Cash and cash equivalents
6.18 Opera�ng segment
6.19 Foreign currency transac�ons and balances
6.20 Impairment
Impairment is recognized at an amount equal to life�me expected credit losses for financial assets for which credit risk has increased significantly
since ini�al recogni�on. For financial assets for which credit risk is low, impairment is recognized at an amount equal to twelve months' expected
credit losses, with the excep�on of trade debts, for which the Company recognises life�me expected credit losses es�mated using internal credit
risk grading based on the Company's historical credit loss experience, adjusted for factors that are specific to debtors, general economic condi�ons,
and an assessment for both the current as well as the forecast direc�on of condi�ons at the repor�ng date, including �me value of money where
appropriate.
The Company is a single opera�ng segment based on internal repor�ng to the Board of Directors of the Company.
Transac�ons in foreign currency are translated to the func�onal currency of the Company using exchange rate prevailing at the date of transac�on.
Monetary assets and liabili�es denominated in foreign currency are translated to the func�onal currency at exchange rate prevailing at the
repor�ng date. Non-monetary assets and liabili�es denominated in foreign currency that are measured at fair value are translated to the func�onal
currency at exchange rate prevailing at the date the fair value is determined. Non-monetary assets and liabili�es denominated in foreign currency
that are measured at historical cost are translated to func�onal currency at exchange rate prevailing at the date of ini�al recogni�on. Any gain or
loss arising on transla�on of foreign currency transac�ons and balances is recognized in profit or loss.
Diluted EPS is calculated by adjus�ng basic EPS by the weighted average number of ordinary shares that would be issued on conversion of all
dilu�ve poten�al ordinary shares into ordinary shares and post-tax effect of changes in profit or loss a�ributable to ordinary shareholders of the
Company that would result from conversion of all dilu�ve poten�al ordinary shares into ordinary shares.
Cash and cash equivalents for the purpose of cash flow statement comprise cash in hand and cash at banks.
Income tax expense comprises current tax and deferred tax. Income tax expense is recognized in profit or loss except to the extent that it relates to
items recognized directly in other comprehensive income, in which case it is recognized in other comprehensive income.
6.15.1 Current taxa�on
Current tax is the amount of tax payable on taxable income for the year and any adjustment to the tax payable in respect of previous years.
Provision for current tax is based on current rates of taxa�on in Pakistan a�er taking into account tax credits, rebates and exemp�ons available, if
any. The amount of unpaid income tax in respect of the current or prior periods is recognized as a liability. Any excess paid over what is due in
respect of the current or prior periods is recognized as an asset.
6.15.2 Deferred taxa�on
Deferred tax is accounted for using the balance sheet approach providing for temporary differences between the carrying amounts of assets and
liabili�es for financial repor�ng purposes and the amounts used for tax purposes. In this regard, the effects on deferred taxa�on of the por�on of
income that is subject to final tax regime is also considered in accordance with the treatment prescribed by the Ins�tute of Chartered Accountants
of Pakistan. Deferred tax is measured at rates that are expected to be applied to the temporary differences when they reverse, based on laws that
have been enacted or substan�vely enacted by the repor�ng date. A deferred tax liability is recognized for all taxable temporary differences. A
deferred tax asset is recognized for deduc�ble temporary differences to the extent that future taxable profits will be available against which
temporary differences can be u�lized. Deferred tax assets are reviewed at each repor�ng date and are reduced to the extent that it is no longer
probable that the related tax benefit will be realized.
6.20.1 Financial assets
The Company recognizes a loss allowance for expected credit losses on financial assets carried at amor�zed cost on date of inital recogni�on. The
amount of expected credit losses is updated on each repor�ng date to reflect the changes in credit risk since ini�al recogni�on of the respec�ve
financial asset.
Basic EPS is calculated by dividing the profit or loss a�ributable to ordinary shareholders of the Company by the weighted average number of
ordinary shares outstanding during the year.
34
6.8 Loans and borrowings
6.9 Trade and other payables
6.10 Provisions and con�ngencies
6.11 Trade and other receivables
6.12 Revenue
6.13 Comprehensive income
6.14 Borrowing costs
6.11.1 Financial assets
These are classified as 'financial assets at amor�zed cost'. On ini�al recogni�on, these are measured at fair value at the date of transac�on, plus
a�ributable transac�on costs, except for trade debts that do not have a significant financing compenent, which are measured at undiscounted
invoice price. Subsequent to ini�al recogni�on, these are measured at amor�zed cost using the effec�ve interest method, with interest recognized
in profit or loss.
Revenue is measured based on the considera�on specified in a contract with a customer. Revenue from opera�ons of the Company are recognized
when the goods are provided, and thereby the performance obliga�ons are sa�sfied. Revenue consists of sale of yarn. The Company's contract
performance obliga�ons are fulfilled at the point in �me when the goods are dispatched to the customer. Invoices are generated and revenue is
recognised at that point in �me, as the control has been transferred to the customers
Provisions are recognized when the Company has a legal and construc�ve obliga�on as a result of past events and it is probable that ou�low of
resources embodying economic benefits will be required to se�le the obliga�on and a reliable es�mate can be made of the amount of obliga�on.
Provision is recognized at an amount that is the best es�mate of the expenditure required to se�le the present obliga�on at the repor�ng date.
Where ou�low of resources embodying economic benefits is not probable, or where a reliable es�mate of the amount of obliga�on cannot be
made, a con�ngent liability is disclosed, unless the possibility of ou�low is remote.
6.11.2 Non-financial assets
These, on ini�al recogni�on and subsequently, are measured at cost.
Comprehensive income is the change in equity resul�ng from transac�ons and other events, other than changes resul�ng from transac�ons with
shareholders in their capacity as shareholders. Total comprehensive income comprises all components of profit or loss and other comprehensive
income ('OCI'). OCI comprises items of income and expense, including reclassifica�on adjustments, that are not recognized in profit or loss as
required or permi�ed by required or permi�ed by accoun�ng and repor�ng standards as applicable in Pakistan, and is presented in 'statement of
comprehensive income.'
Borrowing costs directly a�ributable to the acquisi�on, construc�on or produc�on of qualifying assets, which are assets that necessarily take a
substan�al period of �me to get ready for their intended use or sale, are added to the cost of those assets, un�l such �me as the assets are
substan�ally ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their
expenditure on qualifying asset is deducted from the borrowing costs eligible for capitaliza�on. All other borrowing costs are recognized in profit or
loss as incurred.
6.9.2 Non-financial liabili�es
These, on ini�al recogni�on and subsequently, are measured at cost.
Loans and borrowings are classified as 'financial liabili�es at amor�zed cost'. On ini�al recogni�on, these are measured at cost, being fair value at
the date the liability is incurred, less a�ributable transac�on costs. Subsequent to ini�al recogni�on, these are measured at amor�zed cost with any
difference between cost and value at maturity recognized in the profit or loss over the period of the borrowings on an effec�ve interest basis.
6.9.1 Financial liabili�es
These are classified as 'financial liabili�es at amor�zed cost'. On ini�al recogni�on, these are measured at cost, being their fair value at the date the
liability is incurred, less a�ributable transac�on costs. Subsequent to ini�al recogni�on, these are measured at amor�zed cost using the effec�ve
interest method, with interest recognized in profit or loss.
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
35
6.15 Income tax
6.16 Earnings per share ['EPS']
6.17 Cash and cash equivalents
6.18 Opera�ng segment
6.19 Foreign currency transac�ons and balances
6.20 Impairment
Impairment is recognized at an amount equal to life�me expected credit losses for financial assets for which credit risk has increased significantly
since ini�al recogni�on. For financial assets for which credit risk is low, impairment is recognized at an amount equal to twelve months' expected
credit losses, with the excep�on of trade debts, for which the Company recognises life�me expected credit losses es�mated using internal credit
risk grading based on the Company's historical credit loss experience, adjusted for factors that are specific to debtors, general economic condi�ons,
and an assessment for both the current as well as the forecast direc�on of condi�ons at the repor�ng date, including �me value of money where
appropriate.
The Company is a single opera�ng segment based on internal repor�ng to the Board of Directors of the Company.
Transac�ons in foreign currency are translated to the func�onal currency of the Company using exchange rate prevailing at the date of transac�on.
Monetary assets and liabili�es denominated in foreign currency are translated to the func�onal currency at exchange rate prevailing at the
repor�ng date. Non-monetary assets and liabili�es denominated in foreign currency that are measured at fair value are translated to the func�onal
currency at exchange rate prevailing at the date the fair value is determined. Non-monetary assets and liabili�es denominated in foreign currency
that are measured at historical cost are translated to func�onal currency at exchange rate prevailing at the date of ini�al recogni�on. Any gain or
loss arising on transla�on of foreign currency transac�ons and balances is recognized in profit or loss.
Diluted EPS is calculated by adjus�ng basic EPS by the weighted average number of ordinary shares that would be issued on conversion of all
dilu�ve poten�al ordinary shares into ordinary shares and post-tax effect of changes in profit or loss a�ributable to ordinary shareholders of the
Company that would result from conversion of all dilu�ve poten�al ordinary shares into ordinary shares.
Cash and cash equivalents for the purpose of cash flow statement comprise cash in hand and cash at banks.
Income tax expense comprises current tax and deferred tax. Income tax expense is recognized in profit or loss except to the extent that it relates to
items recognized directly in other comprehensive income, in which case it is recognized in other comprehensive income.
6.15.1 Current taxa�on
Current tax is the amount of tax payable on taxable income for the year and any adjustment to the tax payable in respect of previous years.
Provision for current tax is based on current rates of taxa�on in Pakistan a�er taking into account tax credits, rebates and exemp�ons available, if
any. The amount of unpaid income tax in respect of the current or prior periods is recognized as a liability. Any excess paid over what is due in
respect of the current or prior periods is recognized as an asset.
6.15.2 Deferred taxa�on
Deferred tax is accounted for using the balance sheet approach providing for temporary differences between the carrying amounts of assets and
liabili�es for financial repor�ng purposes and the amounts used for tax purposes. In this regard, the effects on deferred taxa�on of the por�on of
income that is subject to final tax regime is also considered in accordance with the treatment prescribed by the Ins�tute of Chartered Accountants
of Pakistan. Deferred tax is measured at rates that are expected to be applied to the temporary differences when they reverse, based on laws that
have been enacted or substan�vely enacted by the repor�ng date. A deferred tax liability is recognized for all taxable temporary differences. A
deferred tax asset is recognized for deduc�ble temporary differences to the extent that future taxable profits will be available against which
temporary differences can be u�lized. Deferred tax assets are reviewed at each repor�ng date and are reduced to the extent that it is no longer
probable that the related tax benefit will be realized.
6.20.1 Financial assets
The Company recognizes a loss allowance for expected credit losses on financial assets carried at amor�zed cost on date of inital recogni�on. The
amount of expected credit losses is updated on each repor�ng date to reflect the changes in credit risk since ini�al recogni�on of the respec�ve
financial asset.
Basic EPS is calculated by dividing the profit or loss a�ributable to ordinary shareholders of the Company by the weighted average number of
ordinary shares outstanding during the year.
36
6.20.2 Non-financial assets
6.21 Dividend distribu�on to ordinary shareholders
All impairment losses are recognized in profit or loss. An impairment loss is reversed if the reversal can be related objec�vely to an event occurring
a�er the impairment loss was recognized. An impairment loss is reversed only to the extent that the financial asset’s carrying amount a�er the
reversal does not exceed the carrying amount that would have been determined, net of amor�za�on, if no impairment loss had been recognized.
The Company writes off a financial asset when there is informa�on indica�ng that the counter-party is in severe financial condi�on and there is no
realis�c prospect of recovery. Any recoveries made post write-off are recognized in profit or loss.
The carrying amount of the Company’s non-financial assets, other than inventories and deferred tax assets are reviewed at each repor�ng date to
determine whether there is any indica�on of impairment. If any such indica�on exists, then the asset’s recoverable amount is es�mated. The
recoverable amount of an asset or cash genera�ng unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use,
the es�mated future cash flows are discounted to their present values using a pre-tax discount rate that reflects current market assessments of the
�me value of money and the risks specific to the asset or cash genera�ng unit.
An impairment loss is recognized if the carrying amount of the asset or its cash genera�ng unit exceeds its es�mated recoverable amount.
Impairment losses are recognized in profit or loss. Impairment losses recognized in respect of cash genera�ng units are allocated to reduce the
carrying amounts of the assets in a unit on a pro rata basis. Impairment losses recognized in prior periods are assessed at each repor�ng date for
any indica�ons that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the es�mates used in
determining the recoverable amount. An impairment loss is reversed only to that extent that the asset’s carrying amount a�er the reversal does not
exceed the carrying amount that would have been determined, net of deprecia�on and amor�za�on, if no impairment loss had been recognized.
Dividend to ordinary shareholders is recognized as a deduc�on from accumulated profit in statement of changes in equity and as a liability, to the
extent it is unclaimed/unpaid, in the Company’s financial statements in the year in which the dividends are approved by the Company’s
shareholders.
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
37
7 ISSUED, SUBSCRIBED AND PAID-UP CAPITAL
8 SURPLUS ON REVALUATION OF PROPERTY, PLANT AND EQUIPMENT
9 LOAN FROM DIRECTORS AND SPONSORS
9.1 This loan has been obtained from sponsors of the Company and is unsecured and interest free. The loan is payable by June 30, 2021. The loan has
been carried at amor�zed cost which has been determined using a discount rate of 9.85%, being the average effec�ve borrowing rate of the
Company. This loan is subordinated to long term and short term borrowings obtained from various banking ins�tu�ons.
10.1 The finance has been obtained from Silk Bank Limited to finance long term working capital requirements and is secured by charge over opera�ng
fixed assets and current assets of the Company and personal guarantees of the Company's directors. The finance carries profit at three months
KIBOR plus 3.5% per annum (2018: three months KIBOR plus 3.5% per annum), payable quarterly. The finance is repayable in twelve equal
quarterly installments with the first installment due in August 2016. As at repor�ng date, an amount of Rs 50 million is overdue. Upto the
repor�ng date, an amount of Rs. 14.058 million has been accrued on account of interest/markup out of which an amount of Rs. 7.558 million is
overdue.
8,775,000 (2018: 8,775,000) ordinary shares of Rs. 10 each issued for cash 87,750,000 87,750,000
Note 2019 2018
Rupees Rupees
As at beginning of the year 226,964,580 230,269,856
Incremental deprecia�on recognized in other comprehensive income
Incremental deprecia�on for the year (6,124,608) (6,417,486)
Deferred taxa�on 1,776,136 1,925,246
(4,348,472) (4,492,240)
Deferred tax adjustment a�ributable to changes in tax rates - 1,186,964
As at end of the year 222,616,108 226,964,580
Face value 9.2 795,000,000 750,000,000
Less: unamor�zed no�onal interest 9.3 (177,101,347) (213,117,067)
617,898,653 536,882,933
Note 2019 2018
Rupees Rupees
9.2 Movement during the year is as follows:
As at beginning of the year 750,000,000 610,000,000
Obtained during the year 45,000,000 140,000,000
As at end of the year 795,000,000 750,000,000
9.3 Unamor�zed no�onal interest
As at beginning of the year 213,117,067 200,934,167
Arising during the year 16,867,249 52,475,885
Amor�za�on for the year (52,882,969) (40,292,985)
As at end of the year 177,101,347 213,117,067
10 LONG TERM FINANCES - SECURED
These represent long term finances u�lized under interest/markup
arrangements from banking companies
Diminishing musharakah 10.1 83,333,334 83,333,334
Demand finance 10.2 227,500,000 227,500,000
310,833,334 310,833,334
Current maturity presented under current liabili�es (310,833,334) (183,749,998)
- 127,083,336
36
6.20.2 Non-financial assets
6.21 Dividend distribu�on to ordinary shareholders
All impairment losses are recognized in profit or loss. An impairment loss is reversed if the reversal can be related objec�vely to an event occurring
a�er the impairment loss was recognized. An impairment loss is reversed only to the extent that the financial asset’s carrying amount a�er the
reversal does not exceed the carrying amount that would have been determined, net of amor�za�on, if no impairment loss had been recognized.
The Company writes off a financial asset when there is informa�on indica�ng that the counter-party is in severe financial condi�on and there is no
realis�c prospect of recovery. Any recoveries made post write-off are recognized in profit or loss.
The carrying amount of the Company’s non-financial assets, other than inventories and deferred tax assets are reviewed at each repor�ng date to
determine whether there is any indica�on of impairment. If any such indica�on exists, then the asset’s recoverable amount is es�mated. The
recoverable amount of an asset or cash genera�ng unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use,
the es�mated future cash flows are discounted to their present values using a pre-tax discount rate that reflects current market assessments of the
�me value of money and the risks specific to the asset or cash genera�ng unit.
An impairment loss is recognized if the carrying amount of the asset or its cash genera�ng unit exceeds its es�mated recoverable amount.
Impairment losses are recognized in profit or loss. Impairment losses recognized in respect of cash genera�ng units are allocated to reduce the
carrying amounts of the assets in a unit on a pro rata basis. Impairment losses recognized in prior periods are assessed at each repor�ng date for
any indica�ons that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the es�mates used in
determining the recoverable amount. An impairment loss is reversed only to that extent that the asset’s carrying amount a�er the reversal does not
exceed the carrying amount that would have been determined, net of deprecia�on and amor�za�on, if no impairment loss had been recognized.
Dividend to ordinary shareholders is recognized as a deduc�on from accumulated profit in statement of changes in equity and as a liability, to the
extent it is unclaimed/unpaid, in the Company’s financial statements in the year in which the dividends are approved by the Company’s
shareholders.
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
37
7 ISSUED, SUBSCRIBED AND PAID-UP CAPITAL
8 SURPLUS ON REVALUATION OF PROPERTY, PLANT AND EQUIPMENT
9 LOAN FROM DIRECTORS AND SPONSORS
9.1 This loan has been obtained from sponsors of the Company and is unsecured and interest free. The loan is payable by June 30, 2021. The loan has
been carried at amor�zed cost which has been determined using a discount rate of 9.85%, being the average effec�ve borrowing rate of the
Company. This loan is subordinated to long term and short term borrowings obtained from various banking ins�tu�ons.
10.1 The finance has been obtained from Silk Bank Limited to finance long term working capital requirements and is secured by charge over opera�ng
fixed assets and current assets of the Company and personal guarantees of the Company's directors. The finance carries profit at three months
KIBOR plus 3.5% per annum (2018: three months KIBOR plus 3.5% per annum), payable quarterly. The finance is repayable in twelve equal
quarterly installments with the first installment due in August 2016. As at repor�ng date, an amount of Rs 50 million is overdue. Upto the
repor�ng date, an amount of Rs. 14.058 million has been accrued on account of interest/markup out of which an amount of Rs. 7.558 million is
overdue.
8,775,000 (2018: 8,775,000) ordinary shares of Rs. 10 each issued for cash 87,750,000 87,750,000
Note 2019 2018
Rupees Rupees
As at beginning of the year 226,964,580 230,269,856
Incremental deprecia�on recognized in other comprehensive income
Incremental deprecia�on for the year (6,124,608) (6,417,486)
Deferred taxa�on 1,776,136 1,925,246
(4,348,472) (4,492,240)
Deferred tax adjustment a�ributable to changes in tax rates - 1,186,964
As at end of the year 222,616,108 226,964,580
Face value 9.2 795,000,000 750,000,000
Less: unamor�zed no�onal interest 9.3 (177,101,347) (213,117,067)
617,898,653 536,882,933
Note 2019 2018
Rupees Rupees
9.2 Movement during the year is as follows:
As at beginning of the year 750,000,000 610,000,000
Obtained during the year 45,000,000 140,000,000
As at end of the year 795,000,000 750,000,000
9.3 Unamor�zed no�onal interest
As at beginning of the year 213,117,067 200,934,167
Arising during the year 16,867,249 52,475,885
Amor�za�on for the year (52,882,969) (40,292,985)
As at end of the year 177,101,347 213,117,067
10 LONG TERM FINANCES - SECURED
These represent long term finances u�lized under interest/markup
arrangements from banking companies
Diminishing musharakah 10.1 83,333,334 83,333,334
Demand finance 10.2 227,500,000 227,500,000
310,833,334 310,833,334
Current maturity presented under current liabili�es (310,833,334) (183,749,998)
- 127,083,336
38
10.2
11 EMPLOYEES RETIREMENT BENEFITS
Note 2018 2018
Rupees Rupees
11.1 Movement in present value of defined benefit obliga�on
As at beginning of the year 102,176,007 97,128,505
Charged to profit or loss for the year - 17,073,133
Benefits paid during the year (268,670) (17,511,702)
Remeasurements recognized in other comprehensive income - 5,486,071
As at end of the year 101,907,337 102,176,007
12 DEFERRED TAXATION
Deferred tax liability on taxable temporary differences 12.1 158,885,168 163,186,481
Deferred tax asset on deduc�ble temporary differences 12.1 (95,693,353) (85,795,408)
63,191,815 77,391,073
12.1 Recognized deferred tax assets and liabili�es
Deferred tax assets and liabili�es are a�ributable to the following:
As at Recognized in Recognized As at
July 01, 2018 profit or loss in OCI June 30, 2019
Rupees Rupees Rupees Rupees
Deferred tax liabili�es
Opera�ng fixed assets 163,186,481 (4,301,313) - 158,885,168
Deferred tax assets
Employees re�rement benefits (29,631,042) 77,914 - (29,553,128) Unused tax losses and credits (56,164,366)
(9,975,859)
-
(66,140,225)
(85,795,408)
(9,897,945)
-
(95,693,353)
77,391,073
(14,199,258)
-
63,191,815
The Company operates an unfunded gratuity scheme, a defined benefit plan, for all its employees who have completed the minimum qualifying
service period. Under the scheme, the Company pays a lump-sum benefit equal to last drawn monthly gross salary for each year of service to
scheme members whereas the members of the scheme are not required to make any contribu�ons to the scheme. The scheme is administered by
the management of the Company under the supervision and direc�ons of the Board of Directors of the Company. No acturial valua�on has been
carried out as at June 30, 2019 as the Company has discon�nued the scheme.
The finance has been obtained from Na�onal Bank of Pakistan to finance long term working capital requirements and is secured by charge over
opera�ng fixed assets and current assets of the Company and personal guarantees of the Company's directors. The finance carries
interest/markup at three months KIBOR plus 2% per annum (2018: three month kibor plus 2.0% per annum), payable quarterly. The finance is
repayable in eight equal bi-annual installments with the first installment due in June 2017. As at repor�ng date, an amount of Rs 125 million is
overdue. Upto the repor�ng date, an amount of Rs. 45.425 million has been accrued on account of interest/markup out of which an amount of Rs.
18.072 million is overdue.
2019
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
39
As at Recognized in Recognized As at
July 01, 2017 profit or loss in OCI June 30, 2018
Rupees Rupees Rupees Rupees
Deferred tax liabili�es
Opera�ng fixed assets 169,503,974 (5,130,529) (1,186,964) 163,186,481
Deferred tax assets
Employees re�rement benefits (29,138,552) 1,098,471 (1,590,961) (29,631,042)
Unused tax losses and credits (61,961,999) 5,797,633 - (56,164,366)
(91,100,551) 6,896,104 (1,590,961) (85,795,408)
78,403,423 1,765,575 (2,777,925) 77,391,073
12.2
12.3
Note 2019 2018
Rupees Rupees
13 TRADE AND OTHER PAYABLES
Trade creditors 138,945,062 138,665,368
Accrued liabili�es 185,222,580 116,369,756
Advances from customers 13.1 97,941,132 114,578,304 Workers' Welfare Fund 13.2 11,743,143 11,727,078 Other payables 25,181,456 24,434,761
459,033,373 405,775,267
13.1 These represent advances received from customers adjustable against future sales.
Note 2019 2018
Rupees Rupees
13.2 Workers' Welfare Fund
As at beginning of the year 11,727,078 11,750,578 Provision during the year 16,065 - Paid during the year - (23,500)
As at end of the year 11,743,143 11,727,078
14 SHORT TERM BORROWINGS
These represent short term finances obtained from
Banking companies 14.1 722,537,650 722,537,650 Directors and sponsors 14.2 120,980 1,105,333
722,658,630 723,642,983
Deferred tax asset rela�ng to unused tax losses and credits has been recognized only to the extent of unabsorbed deprecia�on losses as the same
are available for an infinite �me under the present income tax laws. Deferred tax asset amoun�ng to Rs. 208.754 million (2018: Rs. 136.643
million) related to unused losses and credits has not been recognized as future taxable profits are not expected to be available against which these
losses and credits could be u�lized.
2018
Revenue from export sales of the Company is subject to taxa�on under the final tax regime, while the remaining por�on of revenue a�racts
assessment under normal provisions of the Ordinance. Deferred tax is provided for only that por�on of �ming differences that represent income
taxable under normal provisions of the Ordinance. These differences are calculated at that propor�on of total �ming differences that the local
sales, other than the indirect exports taxable under sec�on 154 (3) of the Ordinance, bear to the total sales revenue based on historical and future
trends. Deferred tax has been calculated at 29% (2018: 29%) of the �ming differences so determined based on tax rates no�fied by the
Government of Pakistan for future tax years.
38
10.2
11 EMPLOYEES RETIREMENT BENEFITS
Note 2018 2018
Rupees Rupees
11.1 Movement in present value of defined benefit obliga�on
As at beginning of the year 102,176,007 97,128,505
Charged to profit or loss for the year - 17,073,133
Benefits paid during the year (268,670) (17,511,702)
Remeasurements recognized in other comprehensive income - 5,486,071
As at end of the year 101,907,337 102,176,007
12 DEFERRED TAXATION
Deferred tax liability on taxable temporary differences 12.1 158,885,168 163,186,481
Deferred tax asset on deduc�ble temporary differences 12.1 (95,693,353) (85,795,408)
63,191,815 77,391,073
12.1 Recognized deferred tax assets and liabili�es
Deferred tax assets and liabili�es are a�ributable to the following:
As at Recognized in Recognized As at
July 01, 2018 profit or loss in OCI June 30, 2019
Rupees Rupees Rupees Rupees
Deferred tax liabili�es
Opera�ng fixed assets 163,186,481 (4,301,313) - 158,885,168
Deferred tax assets
Employees re�rement benefits (29,631,042) 77,914 - (29,553,128) Unused tax losses and credits (56,164,366)
(9,975,859)
-
(66,140,225)
(85,795,408)
(9,897,945)
-
(95,693,353)
77,391,073
(14,199,258)
-
63,191,815
The Company operates an unfunded gratuity scheme, a defined benefit plan, for all its employees who have completed the minimum qualifying
service period. Under the scheme, the Company pays a lump-sum benefit equal to last drawn monthly gross salary for each year of service to
scheme members whereas the members of the scheme are not required to make any contribu�ons to the scheme. The scheme is administered by
the management of the Company under the supervision and direc�ons of the Board of Directors of the Company. No acturial valua�on has been
carried out as at June 30, 2019 as the Company has discon�nued the scheme.
The finance has been obtained from Na�onal Bank of Pakistan to finance long term working capital requirements and is secured by charge over
opera�ng fixed assets and current assets of the Company and personal guarantees of the Company's directors. The finance carries
interest/markup at three months KIBOR plus 2% per annum (2018: three month kibor plus 2.0% per annum), payable quarterly. The finance is
repayable in eight equal bi-annual installments with the first installment due in June 2017. As at repor�ng date, an amount of Rs 125 million is
overdue. Upto the repor�ng date, an amount of Rs. 45.425 million has been accrued on account of interest/markup out of which an amount of Rs.
18.072 million is overdue.
2019
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
39
As at Recognized in Recognized As at
July 01, 2017 profit or loss in OCI June 30, 2018
Rupees Rupees Rupees Rupees
Deferred tax liabili�es
Opera�ng fixed assets 169,503,974 (5,130,529) (1,186,964) 163,186,481
Deferred tax assets
Employees re�rement benefits (29,138,552) 1,098,471 (1,590,961) (29,631,042)
Unused tax losses and credits (61,961,999) 5,797,633 - (56,164,366)
(91,100,551) 6,896,104 (1,590,961) (85,795,408)
78,403,423 1,765,575 (2,777,925) 77,391,073
12.2
12.3
Note 2019 2018
Rupees Rupees
13 TRADE AND OTHER PAYABLES
Trade creditors 138,945,062 138,665,368
Accrued liabili�es 185,222,580 116,369,756
Advances from customers 13.1 97,941,132 114,578,304 Workers' Welfare Fund 13.2 11,743,143 11,727,078 Other payables 25,181,456 24,434,761
459,033,373 405,775,267
13.1 These represent advances received from customers adjustable against future sales.
Note 2019 2018
Rupees Rupees
13.2 Workers' Welfare Fund
As at beginning of the year 11,727,078 11,750,578 Provision during the year 16,065 - Paid during the year - (23,500)
As at end of the year 11,743,143 11,727,078
14 SHORT TERM BORROWINGS
These represent short term finances obtained from
Banking companies 14.1 722,537,650 722,537,650 Directors and sponsors 14.2 120,980 1,105,333
722,658,630 723,642,983
Deferred tax asset rela�ng to unused tax losses and credits has been recognized only to the extent of unabsorbed deprecia�on losses as the same
are available for an infinite �me under the present income tax laws. Deferred tax asset amoun�ng to Rs. 208.754 million (2018: Rs. 136.643
million) related to unused losses and credits has not been recognized as future taxable profits are not expected to be available against which these
losses and credits could be u�lized.
2018
Revenue from export sales of the Company is subject to taxa�on under the final tax regime, while the remaining por�on of revenue a�racts
assessment under normal provisions of the Ordinance. Deferred tax is provided for only that por�on of �ming differences that represent income
taxable under normal provisions of the Ordinance. These differences are calculated at that propor�on of total �ming differences that the local
sales, other than the indirect exports taxable under sec�on 154 (3) of the Ordinance, bear to the total sales revenue based on historical and future
trends. Deferred tax has been calculated at 29% (2018: 29%) of the �ming differences so determined based on tax rates no�fied by the
Government of Pakistan for future tax years.
40
14.1 Banking companies
14.1.4 For restric�ons on �tle, and assets pledged as security, refer to note 41 to the financial statements.
14.2 Directors and sponsors
These represent interest free loans obtained from directors and sponsors of the Company and are repayable on demand.
15 ACCRUED MARKUP/INTEREST/PROFIT
16 CONTINGENCIES AND COMMITMENTS
16.1 Con�ngencies
16.2 Commitments
17 PROPERTY, PLANT AND EQUIPMENT
16.2.1 The Company is commi�ed to pay Rs. 220,000 (2018: Rs. 220,000) for every month it occupies the office premises owned by a director of the
Company.
16.1.2 Gas Infrastructure Development Cess ['GIDC'] has been levied with effect from December 15, 2011 on industrial gas customers firstly through
OGRA no�fica�on and subsequently via GID Cess Ordinance 2014 and GID Cess Act 2015. The Company, along with other industrial concerns, has
filed a writ pe��on in the Honorable High Court of Sindh challenging the imposi�on of GIDC. On October 26, 2016, the Honorable High Court of
Sindh held that enactment of GIDC Act 2015 is ultra-vires to the cons�tu�on of Pakistan. The Company has not recognised any provision rela�ng
to GIDC aggrega�ng to Rs. 39.39 million.
As at repor�ng date interset/markup/profit amoun�ng to Rs 83.815 million is overdue
14.1.2 The facility has been obtained from banking company for working capital requirements and is secured by charge over current assets and opera�ng
fixed assets of the Company, pledge of stock and personal guarantees of the Company's Directors. The facility carries interest/markup at three
months KIBOR plus 2.00 % per annum (2018: three months KIBOR plus 2.00 % per annum), payable quarterly. As at repor�ng date, an amount of
Rs 648.653 million is over due. Upto the repor�ng date, an amount of Rs. 8.262 million has been acrued on account of interest/markup out of
which an amount of Rs. 5.869 million is overdue.
14.1.3 The aggregate available short term funded facili�es amounts to Rs. 722.537 million (2018: Rs. 722.537 million) out of which Rs. nil (2018: Rs. nil)
remained unavailed as at the repor�ng date.
16.1.1 The Company may have to indemnify its Directors for any losses that may arise due to personal guarantees given by them for securing the debts of
the Company, in case the Company defaults.
14.1.1 These facili�es have been obtained from various banking companies for working capital requirements and are secured by charge over current
assets and opera�ng fixed assets of the Company, pledge of stock and personal guarantees of the Company's Directors. The facility carries
interest/markup at three months KIBOR plus 2% per annum (2018: three months KIBOR plus 2% per annum), payable quarterly. As at repor�ng
date, an amount of Rs 648.653 million is over due. Upto the repor�ng date, an amount of Rs. 113.811 million has been acrued on account of
interest/markup out of which an amount of Rs. 52.316 million is overdue.
Note 2019 2018
Rupees Rupees
These represent short term finances u�lized under interest/markup arrangements
Cash finance 14.1.1 648,653,898 648,653,898
Term loan 14.1.2 73,883,752 73,883,752
722,537,650 722,537,650
Note 2019 2018
Rupees Rupees
Opera�ng fixed assets 17.1 899,998,866 945,929,046
Capital work in progress 17.2 - -
899,998,866 945,929,046
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
41
17
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41
,42
7,8
42
36
,15
5,4
31
Too
ls a
nd
eq
uip
men
t1
,59
0,6
42
-
-
-
1,5
90
,64
2
10
1,3
11
,11
6
27
,95
3
-
1,3
39
,06
9
25
1,5
73
Lab
ora
tory
eq
uip
men
t2
5,1
68
,14
0
-
-
-
25
,16
8,1
40
10
21
,40
2,8
82
37
6,5
26
-
21
,77
9,4
08
3,3
88
,73
2
Fire
figh
�n
g eq
uip
men
t2
,65
2,3
33
-
-
-
2,6
52
,33
3
10
1,8
96
,33
3
75
,60
0
-
1,9
71
,93
3
68
0,4
00
Offi
ce e
qu
ipm
ent
4,7
50
,13
4
-
-
-
4,7
50
,13
4
10
3,1
18
,97
6
16
3,1
16
-
3,2
82
,09
2
1,4
68
,04
2
Furn
itu
re a
nd
fixt
ure
s8
,96
8,8
09
-
-
-
8,9
68
,80
9
10
6,4
77
,94
6
2
49
,08
6
-
6
,72
7,0
32
2,2
41
,77
7
Arm
s an
d a
mm
un
i�o
ns
50
6,9
89
-
-
-
5
06
,98
9
1
04
01
,63
1
10
,53
6
-
41
2,1
67
9
4,8
22
Veh
icle
s4
0,1
01
,09
7
3
39
,59
5
(19
,69
8,7
50
)
-
2
0,7
41
,94
2
2
03
0,9
81
,43
6
1,2
06
,07
9
(14
,78
5,1
82
)
1
7,4
02
,33
3
3,3
39
,60
9
1,7
54
,18
5,6
56
33
9,5
95
(1
9,6
98
,75
0)
-
1,7
34
,82
6,5
01
80
8,2
56
,61
0
4
1,3
56
,20
7
(1
4,7
85
,18
2)
83
4,8
27
,63
5
8
99
,99
8,8
66
Net
bo
ok
As
atA
s at
As
atA
s at
valu
e as
at
July
01
, 20
17
Ad
di�
on
sD
isp
osa
lsTr
ansf
ers
Jun
e 3
0, 2
01
8R
ate
July
01
, 20
17
For
the
year
Ad
just
men
tJu
ne
30
, 20
18
Jun
e 3
0, 2
01
8
Ru
pee
sR
up
ees
Ru
pee
sR
up
ees
Ru
pee
s%
Ru
pee
sR
up
ees
Ru
pee
sR
up
ees
Ru
pee
s
Free
ho
ld la
nd
14
2,8
35
,00
0
-
-
-
14
2,8
35
,00
0
--
-
-
-
14
2,8
35
,00
0
Bu
ildin
gs o
n f
reeh
old
lan
d4
42
,28
5,1
62
-
-
2,3
56
,12
2
44
4,6
41
,28
4
52
37
,68
5,5
23
10
,22
9,9
82
-
24
7,9
15
,50
5
19
6,7
25
,77
9
Pla
nt
and
mac
hin
ery
99
9,9
52
,80
5
5,4
35
,15
0
-
-
1,0
05
,38
7,9
55
54
26
,29
5,8
62
28
,92
9,9
98
-
45
5,2
25
,86
0
55
0,1
62
,09
5
Elec
tric
inst
alla
�o
ns
77
,50
2,3
43
80
,93
0
-
-
77
,58
3,2
73
53
7,5
24
,29
3
2,0
00
,63
2
-
39
,52
4,9
25
38
,05
8,3
48
To
ols
an
d e
qu
ipm
ent
1,5
90
,64
2
-
-
-
1,5
90
,64
2
10
1,2
80
,05
8
31
,05
8
-
1,3
11
,11
6
27
9,5
26
Lab
ora
tory
eq
uip
men
t2
5,1
68
,14
0
-
-
-
25
,16
8,1
40
10
20
,98
4,5
20
41
8,3
62
-
21
,40
2,8
82
3,7
65
,25
8
Fire
figh
�n
g eq
uip
men
t2
,65
2,3
33
-
-
-
2,6
52
,33
3
10
1,8
12
,33
3
84
,00
0
-
1,8
96
,33
3
75
6,0
00
Offi
ce e
qu
ipm
ent
4,5
89
,88
4
16
0,2
50
-
-
4,7
50
,13
4
10
2,9
47
,54
1
17
1,4
35
-
3,1
18
,97
6
1,6
31
,15
8
Furn
itu
re a
nd
fixt
ure
s8
,91
9,4
09
49
,40
0
-
-
8,9
68
,80
9
10
6,2
05
,99
6
27
1,9
50
-
6,4
77
,94
6
2,4
90
,86
3
Arm
s an
d a
mm
un
i�o
ns
50
6,9
89
-
-
-
50
6,9
89
10
38
9,9
24
11
,70
7
-
40
1,6
31
10
5,3
58
Veh
icle
s4
1,7
14
,88
0-
(1,6
13
,78
3)
-4
0,1
01
,09
72
03
0,0
98
,73
92
,17
6,3
51
(1,2
93
,65
4)
30
,98
1,4
36
9,1
19
,66
1
1,7
47
,71
7,5
87
5,7
25
,73
0(1
,61
3,7
83
)2
,35
6,1
22
1,7
54
,18
5,6
56
76
5,2
24
,78
94
4,3
25
,47
5(1
,29
3,6
54
)8
08
,25
6,6
10
94
5,9
29
,04
6
CO
ST/R
EVA
LUED
AM
OU
NT
DEP
REC
IATI
ON
20
19
CO
ST/R
EVA
LUED
AM
OU
NT
DEP
REC
IATI
ON
20
18
17
.1.1
Free
ho
ld la
nd
of
the
Co
mp
any
is lo
cate
d a
t D
istr
ict
Joh
ar A
bad
wit
h a
to
tal a
rea
of
51
9 K
anal
8 M
arla
(2
01
8: 5
19
Kan
al 8
Mar
la).
17
.1.2
Tran
sfer
s re
pre
sen
t tr
ansf
ers
fro
m c
apit
al w
ork
in p
rogr
ess
on
rel
ated
ass
ets
bec
om
ing
avai
lab
le f
or
use
.
40
14.1 Banking companies
14.1.4 For restric�ons on �tle, and assets pledged as security, refer to note 41 to the financial statements.
14.2 Directors and sponsors
These represent interest free loans obtained from directors and sponsors of the Company and are repayable on demand.
15 ACCRUED MARKUP/INTEREST/PROFIT
16 CONTINGENCIES AND COMMITMENTS
16.1 Con�ngencies
16.2 Commitments
17 PROPERTY, PLANT AND EQUIPMENT
16.2.1 The Company is commi�ed to pay Rs. 220,000 (2018: Rs. 220,000) for every month it occupies the office premises owned by a director of the
Company.
16.1.2 Gas Infrastructure Development Cess ['GIDC'] has been levied with effect from December 15, 2011 on industrial gas customers firstly through
OGRA no�fica�on and subsequently via GID Cess Ordinance 2014 and GID Cess Act 2015. The Company, along with other industrial concerns, has
filed a writ pe��on in the Honorable High Court of Sindh challenging the imposi�on of GIDC. On October 26, 2016, the Honorable High Court of
Sindh held that enactment of GIDC Act 2015 is ultra-vires to the cons�tu�on of Pakistan. The Company has not recognised any provision rela�ng
to GIDC aggrega�ng to Rs. 39.39 million.
As at repor�ng date interset/markup/profit amoun�ng to Rs 83.815 million is overdue
14.1.2 The facility has been obtained from banking company for working capital requirements and is secured by charge over current assets and opera�ng
fixed assets of the Company, pledge of stock and personal guarantees of the Company's Directors. The facility carries interest/markup at three
months KIBOR plus 2.00 % per annum (2018: three months KIBOR plus 2.00 % per annum), payable quarterly. As at repor�ng date, an amount of
Rs 648.653 million is over due. Upto the repor�ng date, an amount of Rs. 8.262 million has been acrued on account of interest/markup out of
which an amount of Rs. 5.869 million is overdue.
14.1.3 The aggregate available short term funded facili�es amounts to Rs. 722.537 million (2018: Rs. 722.537 million) out of which Rs. nil (2018: Rs. nil)
remained unavailed as at the repor�ng date.
16.1.1 The Company may have to indemnify its Directors for any losses that may arise due to personal guarantees given by them for securing the debts of
the Company, in case the Company defaults.
14.1.1 These facili�es have been obtained from various banking companies for working capital requirements and are secured by charge over current
assets and opera�ng fixed assets of the Company, pledge of stock and personal guarantees of the Company's Directors. The facility carries
interest/markup at three months KIBOR plus 2% per annum (2018: three months KIBOR plus 2% per annum), payable quarterly. As at repor�ng
date, an amount of Rs 648.653 million is over due. Upto the repor�ng date, an amount of Rs. 113.811 million has been acrued on account of
interest/markup out of which an amount of Rs. 52.316 million is overdue.
Note 2019 2018
Rupees Rupees
These represent short term finances u�lized under interest/markup arrangements
Cash finance 14.1.1 648,653,898 648,653,898
Term loan 14.1.2 73,883,752 73,883,752
722,537,650 722,537,650
Note 2019 2018
Rupees Rupees
Opera�ng fixed assets 17.1 899,998,866 945,929,046
Capital work in progress 17.2 - -
899,998,866 945,929,046
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
41
17
.1O
pe
ra�
ng
fixe
d a
sset
s
Net
bo
ok
As
atA
s at
As
atFo
rA
s at
valu
e a
s at
July
01
, 20
18
Ad
di�
on
sD
isp
osa
lsTr
ansf
ers
Jun
e 3
0, 2
01
9R
ate
July
01
, 20
18
the
ye
arA
dju
stm
en
tJu
ne
30
, 20
19
Jun
e 3
0, 2
01
9
Ru
pee
sR
up
ees
Ru
pee
sR
up
ees
Ru
pee
s%
Ru
pee
sR
up
ees
Ru
pee
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up
ees
Ru
pee
s
Free
ho
ld la
nd
14
2,8
35
,00
0
-
-
-
14
2,8
35
,00
0
--
-
-
-
14
2,8
35
,00
0
Bu
ildin
gs o
n f
reeh
old
lan
d4
44
,64
1,2
84
-
-
-
44
4,6
41
,28
4
52
47
,91
5,5
05
9,8
36
,28
9
-
25
7,7
51
,79
4
18
6,8
89
,49
0
Pla
nt
and
mac
hin
ery
1,0
05
,38
7,9
55
-
-
-
1,0
05
,38
7,9
55
54
55
,22
5,8
60
27
,50
8,1
05
-
48
2,7
33
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5
52
2,6
53
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0
Elec
tric
inst
alla
�o
ns
77
,58
3,2
73
-
-
-
77
,58
3,2
73
53
9,5
24
,92
5
1,9
02
,91
7
-
41
,42
7,8
42
36
,15
5,4
31
Too
ls a
nd
eq
uip
men
t1
,59
0,6
42
-
-
-
1,5
90
,64
2
10
1,3
11
,11
6
27
,95
3
-
1,3
39
,06
9
25
1,5
73
Lab
ora
tory
eq
uip
men
t2
5,1
68
,14
0
-
-
-
25
,16
8,1
40
10
21
,40
2,8
82
37
6,5
26
-
21
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9,4
08
3,3
88
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2
Fire
figh
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g eq
uip
men
t2
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2,3
33
-
-
-
2,6
52
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10
1,8
96
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3
75
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0
-
1,9
71
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3
68
0,4
00
Offi
ce e
qu
ipm
ent
4,7
50
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4
-
-
-
4,7
50
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4
10
3,1
18
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6
16
3,1
16
-
3,2
82
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2
1,4
68
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2
Furn
itu
re a
nd
fixt
ure
s8
,96
8,8
09
-
-
-
8,9
68
,80
9
10
6,4
77
,94
6
2
49
,08
6
-
6
,72
7,0
32
2,2
41
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7
Arm
s an
d a
mm
un
i�o
ns
50
6,9
89
-
-
-
5
06
,98
9
1
04
01
,63
1
10
,53
6
-
41
2,1
67
9
4,8
22
Veh
icle
s4
0,1
01
,09
7
3
39
,59
5
(19
,69
8,7
50
)
-
2
0,7
41
,94
2
2
03
0,9
81
,43
6
1,2
06
,07
9
(14
,78
5,1
82
)
1
7,4
02
,33
3
3,3
39
,60
9
1,7
54
,18
5,6
56
33
9,5
95
(1
9,6
98
,75
0)
-
1,7
34
,82
6,5
01
80
8,2
56
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0
4
1,3
56
,20
7
(1
4,7
85
,18
2)
83
4,8
27
,63
5
8
99
,99
8,8
66
Net
bo
ok
As
atA
s at
As
atA
s at
valu
e as
at
July
01
, 20
17
Ad
di�
on
sD
isp
osa
lsTr
ansf
ers
Jun
e 3
0, 2
01
8R
ate
July
01
, 20
17
For
the
year
Ad
just
men
tJu
ne
30
, 20
18
Jun
e 3
0, 2
01
8
Ru
pee
sR
up
ees
Ru
pee
sR
up
ees
Ru
pee
s%
Ru
pee
sR
up
ees
Ru
pee
sR
up
ees
Ru
pee
s
Free
ho
ld la
nd
14
2,8
35
,00
0
-
-
-
14
2,8
35
,00
0
--
-
-
-
14
2,8
35
,00
0
Bu
ildin
gs o
n f
reeh
old
lan
d4
42
,28
5,1
62
-
-
2,3
56
,12
2
44
4,6
41
,28
4
52
37
,68
5,5
23
10
,22
9,9
82
-
24
7,9
15
,50
5
19
6,7
25
,77
9
Pla
nt
and
mac
hin
ery
99
9,9
52
,80
5
5,4
35
,15
0
-
-
1,0
05
,38
7,9
55
54
26
,29
5,8
62
28
,92
9,9
98
-
45
5,2
25
,86
0
55
0,1
62
,09
5
Elec
tric
inst
alla
�o
ns
77
,50
2,3
43
80
,93
0
-
-
77
,58
3,2
73
53
7,5
24
,29
3
2,0
00
,63
2
-
39
,52
4,9
25
38
,05
8,3
48
To
ols
an
d e
qu
ipm
ent
1,5
90
,64
2
-
-
-
1,5
90
,64
2
10
1,2
80
,05
8
31
,05
8
-
1,3
11
,11
6
27
9,5
26
Lab
ora
tory
eq
uip
men
t2
5,1
68
,14
0
-
-
-
25
,16
8,1
40
10
20
,98
4,5
20
41
8,3
62
-
21
,40
2,8
82
3,7
65
,25
8
Fire
figh
�n
g eq
uip
men
t2
,65
2,3
33
-
-
-
2,6
52
,33
3
10
1,8
12
,33
3
84
,00
0
-
1,8
96
,33
3
75
6,0
00
Offi
ce e
qu
ipm
ent
4,5
89
,88
4
16
0,2
50
-
-
4,7
50
,13
4
10
2,9
47
,54
1
17
1,4
35
-
3,1
18
,97
6
1,6
31
,15
8
Furn
itu
re a
nd
fixt
ure
s8
,91
9,4
09
49
,40
0
-
-
8,9
68
,80
9
10
6,2
05
,99
6
27
1,9
50
-
6,4
77
,94
6
2,4
90
,86
3
Arm
s an
d a
mm
un
i�o
ns
50
6,9
89
-
-
-
50
6,9
89
10
38
9,9
24
11
,70
7
-
40
1,6
31
10
5,3
58
Veh
icle
s4
1,7
14
,88
0-
(1,6
13
,78
3)
-4
0,1
01
,09
72
03
0,0
98
,73
92
,17
6,3
51
(1,2
93
,65
4)
30
,98
1,4
36
9,1
19
,66
1
1,7
47
,71
7,5
87
5,7
25
,73
0(1
,61
3,7
83
)2
,35
6,1
22
1,7
54
,18
5,6
56
76
5,2
24
,78
94
4,3
25
,47
5(1
,29
3,6
54
)8
08
,25
6,6
10
94
5,9
29
,04
6
CO
ST/R
EVA
LUED
AM
OU
NT
DEP
REC
IATI
ON
20
19
CO
ST/R
EVA
LUED
AM
OU
NT
DEP
REC
IATI
ON
20
18
17
.1.1
Free
ho
ld la
nd
of
the
Co
mp
any
is lo
cate
d a
t D
istr
ict
Joh
ar A
bad
wit
h a
to
tal a
rea
of
51
9 K
anal
8 M
arla
(2
01
8: 5
19
Kan
al 8
Mar
la).
17
.1.2
Tran
sfer
s re
pre
sen
t tr
ansf
ers
fro
m c
apit
al w
ork
in p
rogr
ess
on
rel
ated
ass
ets
bec
om
ing
avai
lab
le f
or
use
.
42
17
.1.3
Dis
po
sal o
f o
pe
ra�
ng
fixe
d a
sset
s
Co
st/r
eva
lue
dA
ccu
mu
late
dN
etD
isp
osa
lG
ain
/(lo
ss)
Mo
de
of
amo
un
td
ep
reci
a�o
nb
oo
k va
lue
pro
cee
ds
on
dis
po
sal
dis
po
sal
Par
�cu
lars
of
bu
yer
Ru
pee
sR
up
ees
Ru
pee
sR
up
ees
Ru
pee
s
Veh
icle
s
Toyo
ta P
rad
o3
,60
0,1
87
3,3
40
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2
25
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15
2,4
00
,00
0
2,1
40
,48
5
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go�
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bal
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ahu
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in, L
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re.
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nd
a C
ivic
1,7
66
,00
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30
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ahu
dd
in, L
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re.
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nd
a C
ivic
1,3
87
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9
1,2
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0
15
3,3
39
80
0,0
00
64
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61
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nM
eh
bo
ob
Usm
an, L
aho
re.
Toyo
ta V
igo
2,2
28
,82
5
2,0
24
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8
20
4,6
17
70
0,0
00
49
5,3
83
Ne
go�
a�o
nIq
bal
Sal
ahu
dd
in, L
aho
re.
Toyo
ta S
/Cab
in1
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0,1
50
1,2
90
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3
32
9,5
07
50
0,0
00
17
0,4
93
Ne
go�
a�o
nIq
bal
Sal
ahu
dd
in, L
aho
re.
Suzu
ki B
ola
n4
58
,84
9
36
3,6
24
95
,22
5
29
0,0
00
19
4,7
75
Ne
go�
a�o
nSa
jjad
Ali,
Lah
ore
.
Suzu
ki M
ehra
n3
95
,00
0
36
5,4
52
29
,54
8
25
0,0
00
22
0,4
52
Ne
go�
a�o
nIq
bal
Sal
ahu
dd
in, L
aho
re.
Suzu
ki C
ult
us
96
1,4
00
77
3,0
53
18
8,3
47
70
0,0
00
51
1,6
53
Ne
go�
a�o
nM
ajid
La�
f, L
aho
re.
Ho
nd
a C
ivic
1,3
24
,50
0
38
4,9
88
93
9,5
12
1,3
50
,00
0
41
0,4
88
Ne
go�
a�o
nN
ade
em
Ab
bas
, Lah
ore
.
Ho
nd
a C
ity
1,5
99
,04
0
39
9,7
60
1,1
99
,28
0
51
1,0
56
(68
8,2
24
)
Ne
go�
a�o
nR
abia
Has
an, K
arac
hi.
Suzu
ki C
ult
us
99
2,9
85
84
8,0
47
14
4,9
38
14
4,7
06
(23
2)
Ne
go�
a�o
nA
bd
usa
lam
, Lah
ore
.
Ho
nd
a C
ivic
2,3
32
,11
0
1,3
82
,84
8
94
9,2
62
85
9,7
09
(89
,55
3)
N
ego
�a�
on
Yusu
f Sa
lah
ud
din
, Lah
ore
.
Mo
tor
Bik
e1
05
,20
0
7
8,5
41
2
6,6
59
4
5,0
00
1
8,3
41
N
ego
�a�
on
Sajj
ad A
li, L
aho
re.
Mo
tor
Bik
e1
01
,10
0
7
4,9
47
2
6,1
53
4
5,0
00
1
8,8
47
N
ego
�a�
on
Ab
du
r R
azza
q, L
aho
re.
Mo
tor
Bik
e7
2,7
20
4
2,1
27
3
0,5
93
2
8,0
00
(2
,59
3)
N
ego
�a�
on
Zafa
r A
bb
as, L
aho
re.
Mo
tor
Bik
e7
6,9
60
5
0,4
72
2
6,4
88
2
5,0
00
(1
,48
8)
N
ego
�a�
on
Nae
em
, Lah
ore
Mo
tor
Bik
e7
6,6
05
5
0,7
18
2
5,8
87
2
5,0
00
(8
87
)
N
ego
�a�
on
A�
f, L
aho
re
Mo
tor
Bik
e1
05
,20
0
7
5,7
07
2
9,4
93
3
5,0
00
5
,50
7
N
ego
�a�
on
Alla
h D
ad, L
aho
re.
Mo
tor
Bik
e9
2,1
00
7
7,9
36
1
4,1
64
3
5,0
00
2
0,8
36
N
ego
�a�
on
You
suf,
Lah
ore
.
Mo
tor
Bik
e9
4,3
50
7
5,4
57
1
8,8
93
3
5,0
00
1
6,1
07
N
ego
�a�
on
Rafi
qu
e, L
aho
re.
Mo
tor
Bik
e9
3,3
85
7
6,6
29
1
6,7
56
3
5,0
00
1
8,2
44
N
ego
�a�
on
Um
air
Bu
�, L
aho
re.
Mo
tor
Bik
e1
09
,10
0
98
,36
1
10
,73
9
45
,00
0
34
,26
1
Ne
go�
a�o
nIq
bal
Sal
ahu
dd
in, L
aho
re.
Mo
tor
Bik
e1
05
,37
5
75
,85
2
29
,52
3
36
,22
0
6,6
97
Ne
go�
a�o
nIq
bal
Sal
ahu
dd
in, L
aho
re.
19
,69
8,7
50
14
,78
5,1
82
4,9
13
,56
8
9,6
64
,69
1
4,7
51
,12
3
Co
st/r
eval
ued
Acc
um
ula
ted
Net
Dis
po
sal
Gai
n/(
loss
)M
od
e o
f
amo
un
td
epre
cia�
on
bo
ok
valu
ep
roce
eds
on
dis
po
sal
dis
po
sal
Par�
cula
rs o
f b
uye
r
Ru
pee
sR
up
ees
Ru
pee
sR
up
ees
Ru
pee
s
Veh
icle
s
Toyo
ta C
oro
lla1
,40
6,5
13
1,1
35
,51
3
27
1,0
00
80
0,0
00
52
9,0
00
Neg
o�
a�o
nH
amid
Asg
har
Aw
an
26
9-A
l Far
eed
to
wn
, Jo
har
abad
Mo
tor
Bik
e8
9,2
10
68
,68
9
20
,52
1
35
,00
0
14
,47
9
Neg
o�
a�o
nSa
eed
an
d C
om
pan
y
17
-Ash
rafi
Mar
ket,
Lah
ore
Mo
tor
Bik
e1
18
,06
0
89
,45
2
28
,60
8
40
,00
0
11
,39
2
Neg
o�
a�o
nM
oh
amm
ad K
han
42
-G, G
ulb
erg
II, L
aho
re
1,6
13
,78
31
,29
3,6
54
32
0,1
29
87
5,0
00
55
4,8
71
20
18
20
19
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
43
Note 2019 2018
Rupees Rupees
17.1.4 The deprecia�on charge for the year has been allocated as follows:
Cost of sales 26 39,727,390
41,694,032
Administra�ve and general expenses 28 1,628,817
2,631,443
41,356,207
44,325,475
17.1.5
Accumulated Net
Cost deprecia�on book value
Rupees Rupees Rupees
Freehold land 144,868 - 144,868
Buildings on freehold land 142,157,800 56,518,090 85,639,710
Plant and machinery 1,151,056,760 466,628,746 684,428,014
Electric installa�on 55,565,912 27,316,301 28,249,611
Laboratory equipment 4,282,115 3,723,902 558,213
Fire figh�ng equipment 382,181 287,459 94,722
Accumulated Net
Cost deprecia�on book value
Rupees Rupees Rupees
Freehold land 144,868 - 144,868
Buildings on freehold land 142,157,800 52,010,737 90,147,063 Plant and machinery 1,151,056,760 430,606,219 720,450,541 Electric installa�on 55,565,912 25,829,479 29,736,433 Laboratory equipment 4,282,115 3,661,878 620,237 Fire figh�ng equipment 382,181 276,934 105,247
15.1.6
Rupees
Freehold land 121,409,750
Buildings on freehold land 187,675,346
Plant and machinery 443,114,400
Electric installa�on 34,800,000
Laboratory equipment 3,984,400
Fire figh�ng equipment 800,000
791,783,896
17.2 Capital work in progress
As at As at
July 01, 2018 Addi�ons Transfers June 30, 2019
Rupees Rupees Rupees Rupees
Building -
-
-
-
-
-
-
-
Had there been no revalua�on, the cost, accumulated deprecia�on and net book values of revalued items would have been as follows:
2019
2019
2018
Most recent valua�on of land, building, plant and machinary was carried out by an independent valuer Messrs Engineering Services (Private)
Limited as on October 21, 2015. For basis of valua�on and other fair value measurement disclosures, refer to note 40.
As per most recent valua�on, forced sale values of freehold land, buildings on freehold land, pland and machinery, electric installa�on, laboratory
equipment, fire figh�ng equipment are as follows:
42
17
.1.3
Dis
po
sal o
f o
pe
ra�
ng
fixe
d a
sset
s
Co
st/r
eva
lue
dA
ccu
mu
late
dN
etD
isp
osa
lG
ain
/(lo
ss)
Mo
de
of
amo
un
td
ep
reci
a�o
nb
oo
k va
lue
pro
cee
ds
on
dis
po
sal
dis
po
sal
Par
�cu
lars
of
bu
yer
Ru
pee
sR
up
ees
Ru
pee
sR
up
ees
Ru
pee
s
Veh
icle
s
Toyo
ta P
rad
o3
,60
0,1
87
3,3
40
,67
2
25
9,5
15
2,4
00
,00
0
2,1
40
,48
5
Ne
go�
a�o
nIq
bal
Sal
ahu
dd
in, L
aho
re.
Ho
nd
a C
ivic
1,7
66
,00
0
1,6
00
,87
0
16
5,1
30
77
0,0
00
60
4,8
70
Ne
go�
a�o
nIq
bal
Sal
ahu
dd
in, L
aho
re.
Ho
nd
a C
ivic
1,3
87
,60
9
1,2
34
,27
0
15
3,3
39
80
0,0
00
64
6,6
61
Ne
go�
a�o
nM
eh
bo
ob
Usm
an, L
aho
re.
Toyo
ta V
igo
2,2
28
,82
5
2,0
24
,20
8
20
4,6
17
70
0,0
00
49
5,3
83
Ne
go�
a�o
nIq
bal
Sal
ahu
dd
in, L
aho
re.
Toyo
ta S
/Cab
in1
,62
0,1
50
1,2
90
,64
3
32
9,5
07
50
0,0
00
17
0,4
93
Ne
go�
a�o
nIq
bal
Sal
ahu
dd
in, L
aho
re.
Suzu
ki B
ola
n4
58
,84
9
36
3,6
24
95
,22
5
29
0,0
00
19
4,7
75
Ne
go�
a�o
nSa
jjad
Ali,
Lah
ore
.
Suzu
ki M
ehra
n3
95
,00
0
36
5,4
52
29
,54
8
25
0,0
00
22
0,4
52
Ne
go�
a�o
nIq
bal
Sal
ahu
dd
in, L
aho
re.
Suzu
ki C
ult
us
96
1,4
00
77
3,0
53
18
8,3
47
70
0,0
00
51
1,6
53
Ne
go�
a�o
nM
ajid
La�
f, L
aho
re.
Ho
nd
a C
ivic
1,3
24
,50
0
38
4,9
88
93
9,5
12
1,3
50
,00
0
41
0,4
88
Ne
go�
a�o
nN
ade
em
Ab
bas
, Lah
ore
.
Ho
nd
a C
ity
1,5
99
,04
0
39
9,7
60
1,1
99
,28
0
51
1,0
56
(68
8,2
24
)
Ne
go�
a�o
nR
abia
Has
an, K
arac
hi.
Suzu
ki C
ult
us
99
2,9
85
84
8,0
47
14
4,9
38
14
4,7
06
(23
2)
Ne
go�
a�o
nA
bd
usa
lam
, Lah
ore
.
Ho
nd
a C
ivic
2,3
32
,11
0
1,3
82
,84
8
94
9,2
62
85
9,7
09
(89
,55
3)
N
ego
�a�
on
Yusu
f Sa
lah
ud
din
, Lah
ore
.
Mo
tor
Bik
e1
05
,20
0
7
8,5
41
2
6,6
59
4
5,0
00
1
8,3
41
N
ego
�a�
on
Sajj
ad A
li, L
aho
re.
Mo
tor
Bik
e1
01
,10
0
7
4,9
47
2
6,1
53
4
5,0
00
1
8,8
47
N
ego
�a�
on
Ab
du
r R
azza
q, L
aho
re.
Mo
tor
Bik
e7
2,7
20
4
2,1
27
3
0,5
93
2
8,0
00
(2
,59
3)
N
ego
�a�
on
Zafa
r A
bb
as, L
aho
re.
Mo
tor
Bik
e7
6,9
60
5
0,4
72
2
6,4
88
2
5,0
00
(1
,48
8)
N
ego
�a�
on
Nae
em
, Lah
ore
Mo
tor
Bik
e7
6,6
05
5
0,7
18
2
5,8
87
2
5,0
00
(8
87
)
N
ego
�a�
on
A�
f, L
aho
re
Mo
tor
Bik
e1
05
,20
0
7
5,7
07
2
9,4
93
3
5,0
00
5
,50
7
N
ego
�a�
on
Alla
h D
ad, L
aho
re.
Mo
tor
Bik
e9
2,1
00
7
7,9
36
1
4,1
64
3
5,0
00
2
0,8
36
N
ego
�a�
on
You
suf,
Lah
ore
.
Mo
tor
Bik
e9
4,3
50
7
5,4
57
1
8,8
93
3
5,0
00
1
6,1
07
N
ego
�a�
on
Rafi
qu
e, L
aho
re.
Mo
tor
Bik
e9
3,3
85
7
6,6
29
1
6,7
56
3
5,0
00
1
8,2
44
N
ego
�a�
on
Um
air
Bu
�, L
aho
re.
Mo
tor
Bik
e1
09
,10
0
98
,36
1
10
,73
9
45
,00
0
34
,26
1
Ne
go�
a�o
nIq
bal
Sal
ahu
dd
in, L
aho
re.
Mo
tor
Bik
e1
05
,37
5
75
,85
2
29
,52
3
36
,22
0
6,6
97
Ne
go�
a�o
nIq
bal
Sal
ahu
dd
in, L
aho
re.
19
,69
8,7
50
14
,78
5,1
82
4,9
13
,56
8
9,6
64
,69
1
4,7
51
,12
3
Co
st/r
eval
ued
Acc
um
ula
ted
Net
Dis
po
sal
Gai
n/(
loss
)M
od
e o
f
amo
un
td
epre
cia�
on
bo
ok
valu
ep
roce
eds
on
dis
po
sal
dis
po
sal
Par�
cula
rs o
f b
uye
r
Ru
pee
sR
up
ees
Ru
pee
sR
up
ees
Ru
pee
s
Veh
icle
s
Toyo
ta C
oro
lla1
,40
6,5
13
1,1
35
,51
3
27
1,0
00
80
0,0
00
52
9,0
00
Neg
o�
a�o
nH
amid
Asg
har
Aw
an
26
9-A
l Far
eed
to
wn
, Jo
har
abad
Mo
tor
Bik
e8
9,2
10
68
,68
9
20
,52
1
35
,00
0
14
,47
9
Neg
o�
a�o
nSa
eed
an
d C
om
pan
y
17
-Ash
rafi
Mar
ket,
Lah
ore
Mo
tor
Bik
e1
18
,06
0
89
,45
2
28
,60
8
40
,00
0
11
,39
2
Neg
o�
a�o
nM
oh
amm
ad K
han
42
-G, G
ulb
erg
II, L
aho
re
1,6
13
,78
31
,29
3,6
54
32
0,1
29
87
5,0
00
55
4,8
71
20
18
20
19
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
43
Note 2019 2018
Rupees Rupees
17.1.4 The deprecia�on charge for the year has been allocated as follows:
Cost of sales 26 39,727,390
41,694,032
Administra�ve and general expenses 28 1,628,817
2,631,443
41,356,207
44,325,475
17.1.5
Accumulated Net
Cost deprecia�on book value
Rupees Rupees Rupees
Freehold land 144,868 - 144,868
Buildings on freehold land 142,157,800 56,518,090 85,639,710
Plant and machinery 1,151,056,760 466,628,746 684,428,014
Electric installa�on 55,565,912 27,316,301 28,249,611
Laboratory equipment 4,282,115 3,723,902 558,213
Fire figh�ng equipment 382,181 287,459 94,722
Accumulated Net
Cost deprecia�on book value
Rupees Rupees Rupees
Freehold land 144,868 - 144,868
Buildings on freehold land 142,157,800 52,010,737 90,147,063 Plant and machinery 1,151,056,760 430,606,219 720,450,541 Electric installa�on 55,565,912 25,829,479 29,736,433 Laboratory equipment 4,282,115 3,661,878 620,237 Fire figh�ng equipment 382,181 276,934 105,247
15.1.6
Rupees
Freehold land 121,409,750
Buildings on freehold land 187,675,346
Plant and machinery 443,114,400
Electric installa�on 34,800,000
Laboratory equipment 3,984,400
Fire figh�ng equipment 800,000
791,783,896
17.2 Capital work in progress
As at As at
July 01, 2018 Addi�ons Transfers June 30, 2019
Rupees Rupees Rupees Rupees
Building -
-
-
-
-
-
-
-
Had there been no revalua�on, the cost, accumulated deprecia�on and net book values of revalued items would have been as follows:
2019
2019
2018
Most recent valua�on of land, building, plant and machinary was carried out by an independent valuer Messrs Engineering Services (Private)
Limited as on October 21, 2015. For basis of valua�on and other fair value measurement disclosures, refer to note 40.
As per most recent valua�on, forced sale values of freehold land, buildings on freehold land, pland and machinery, electric installa�on, laboratory
equipment, fire figh�ng equipment are as follows:
44
As at As at
July 01, 2017 Addi�ons Transfers June 30, 2018
Rupees Rupees Rupees Rupees
Building 2,356,122
-
(2,356,122)
-
2,356,122
-
(2,356,122)
-
18 LONG TERM DEPOSITS
Note 2019 2018
Rupees Rupees
19 STORES, SPARES AND LOOSE TOOLS
Stores 38,539,753 38,244,270
Spares and loose tools 42,082,845 42,478,859
80,622,598 80,723,129
19.1 It is imprac�cable to dis�nguish spares and loose tools each from the other.
19.2 There no stores and spares held exclusively for capitaliza�on.
20 STOCK IN TRADE
Raw material 456,545,598 459,551,667
Work in process - 27,674,737
Finished goods 20.1 108,894,900 113,221,066
565,440,498 600,447,470
20.1
20.2
Note 2019 2018
Rupees Rupees
21 TRADE DEBTS
Local 96,582,970 100,053,918
96,582,970
100,053,918
22 ADVANCES, DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES
Advances to suppliers 5,466,084
318,007
Advances to employees 22.1
- against purchases and expenses 718,035
578,351
- against salaries and benefits 12,837,167
6,037,793
Security deposits 1,613,107
1,613,107
Prepayments 3,444,223
5,943,226 Sales tax refundable 20,534,172
24,551,311
Insurance claims receivable 1,922,460
1,922,460 Other receivables 1,326,864
1,638,659
47,862,112
42,602,914
22.1
2018
These have been deposited with various u�lity companies and regulatory authori�es. These are classified as 'financial assets at amor�zed cost'
under IFRS 9 'Financial Instruments - Recogni�on and Measurement' which are required to be carried at amor�zed cost. However, these, being held
for an indefinite period with no fixed maturity date, are carried at cost as their amor�zed cost is imprac�cable to determine.
Details of stock pledged as security are referred to in note 41 to the financial statements.
No advances have been given to any of the directors of the Company.
Stock of finished goods include stock of waste valued at net realizable value of Rs. nil. (2018: Rs. 966,816).
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
45
25 SALES - NET
26 COST OF SALES
24.1 Effec�ve markup rate in respect of deposit/saving accounts, for the year, ranges from 5% to 5.5% (2018: 4.5% to 5%).
Note 2019 2018
Rupees Rupees
23 CURRENT TAXATION
Advance income tax/income tax refundable 13,194,070 35,692,917
Provision for taxa�on 32 (1,396,808) (23,363,082)
11,797,262 12,329,835
24 CASH AND BANK BALANCES
Cash in hand 28,802 79,017
Cash at banks
current accounts 2,471,277 2,129,451
deposit/saving accounts 24.1 1,762 13,476
2,473,039 2,142,927
2,501,841 2,221,944
Note 2019 2018
Rupees Rupees
Yarn 110,790,102 1,880,077,640
Waste 954,547 32,450,111
111,744,649 1,912,527,751
Raw material consumed 26.1 75,709,751 1,485,542,077
Stores, spares and loose tools consumed 3,021,321 59,455,159
Salaries, wages and benefits 26.2 75,032,666 199,168,268
Power and fuel 35,757,109 310,556,695
Insurance 2,259,264 8,573,637 Vehicle running and maintenance 395,871 1,252,631 Deprecia�on 17.1.4 39,727,390 41,694,032 Others 2,822,463 5,095,454
Manufacturing cost 234,725,835 2,111,337,953
Work in process
As at beginning of the year 27,674,737 26,551,504 As at end of the year - (27,674,737)
27,674,737 (1,123,233)
Cost of goods manufactured 262,400,572 2,110,214,720
Finished goods
As at beginning of the year 113,221,066 157,991,365 As at end of the year (108,894,900) (113,221,066)
4,326,166 44,770,299
266,726,738 2,154,985,019
26.1 Raw material consumed
As at beginning of the year 459,551,667 807,678,103 Purchased during the year 72,703,682 1,137,415,641 As at end of the year (456,545,598) (459,551,667)
75,709,751 1,485,542,077
44
As at As at
July 01, 2017 Addi�ons Transfers June 30, 2018
Rupees Rupees Rupees Rupees
Building 2,356,122
-
(2,356,122)
-
2,356,122
-
(2,356,122)
-
18 LONG TERM DEPOSITS
Note 2019 2018
Rupees Rupees
19 STORES, SPARES AND LOOSE TOOLS
Stores 38,539,753 38,244,270
Spares and loose tools 42,082,845 42,478,859
80,622,598 80,723,129
19.1 It is imprac�cable to dis�nguish spares and loose tools each from the other.
19.2 There no stores and spares held exclusively for capitaliza�on.
20 STOCK IN TRADE
Raw material 456,545,598 459,551,667
Work in process - 27,674,737
Finished goods 20.1 108,894,900 113,221,066
565,440,498 600,447,470
20.1
20.2
Note 2019 2018
Rupees Rupees
21 TRADE DEBTS
Local 96,582,970 100,053,918
96,582,970
100,053,918
22 ADVANCES, DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES
Advances to suppliers 5,466,084
318,007
Advances to employees 22.1
- against purchases and expenses 718,035
578,351
- against salaries and benefits 12,837,167
6,037,793
Security deposits 1,613,107
1,613,107
Prepayments 3,444,223
5,943,226 Sales tax refundable 20,534,172
24,551,311
Insurance claims receivable 1,922,460
1,922,460 Other receivables 1,326,864
1,638,659
47,862,112
42,602,914
22.1
2018
These have been deposited with various u�lity companies and regulatory authori�es. These are classified as 'financial assets at amor�zed cost'
under IFRS 9 'Financial Instruments - Recogni�on and Measurement' which are required to be carried at amor�zed cost. However, these, being held
for an indefinite period with no fixed maturity date, are carried at cost as their amor�zed cost is imprac�cable to determine.
Details of stock pledged as security are referred to in note 41 to the financial statements.
No advances have been given to any of the directors of the Company.
Stock of finished goods include stock of waste valued at net realizable value of Rs. nil. (2018: Rs. 966,816).
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
45
25 SALES - NET
26 COST OF SALES
24.1 Effec�ve markup rate in respect of deposit/saving accounts, for the year, ranges from 5% to 5.5% (2018: 4.5% to 5%).
Note 2019 2018
Rupees Rupees
23 CURRENT TAXATION
Advance income tax/income tax refundable 13,194,070 35,692,917
Provision for taxa�on 32 (1,396,808) (23,363,082)
11,797,262 12,329,835
24 CASH AND BANK BALANCES
Cash in hand 28,802 79,017
Cash at banks
current accounts 2,471,277 2,129,451
deposit/saving accounts 24.1 1,762 13,476
2,473,039 2,142,927
2,501,841 2,221,944
Note 2019 2018
Rupees Rupees
Yarn 110,790,102 1,880,077,640
Waste 954,547 32,450,111
111,744,649 1,912,527,751
Raw material consumed 26.1 75,709,751 1,485,542,077
Stores, spares and loose tools consumed 3,021,321 59,455,159
Salaries, wages and benefits 26.2 75,032,666 199,168,268
Power and fuel 35,757,109 310,556,695
Insurance 2,259,264 8,573,637 Vehicle running and maintenance 395,871 1,252,631 Deprecia�on 17.1.4 39,727,390 41,694,032 Others 2,822,463 5,095,454
Manufacturing cost 234,725,835 2,111,337,953
Work in process
As at beginning of the year 27,674,737 26,551,504 As at end of the year - (27,674,737)
27,674,737 (1,123,233)
Cost of goods manufactured 262,400,572 2,110,214,720
Finished goods
As at beginning of the year 113,221,066 157,991,365 As at end of the year (108,894,900) (113,221,066)
4,326,166 44,770,299
266,726,738 2,154,985,019
26.1 Raw material consumed
As at beginning of the year 459,551,667 807,678,103 Purchased during the year 72,703,682 1,137,415,641 As at end of the year (456,545,598) (459,551,667)
75,709,751 1,485,542,077
46
26.2
Note 2019 2018
Rupees Rupees
27 SELLING AND DISTRIBUTION EXPENSES
Salaries wages and benefits 27.1 573,285
5,765,146
Inland transporta�on 965,463
1,050,668
Ocean freight and forwarding 920
5,106
Traveling -
33,320
Communica�on 9,100
107,610
Insurance 23,838
95,356
Commission 171,112
1,909,085
Vehicle running and maintenance 4,050 394,590
Others - 29,890
1,747,768 9,390,771
27.1
Note 2019 2018
Rupees Rupees
28 ADMINISTRATIVE AND GENERAL EXPENSES
Directors' remunera�on 2,159,191 8,399,333
Salaries and benefits 28.1 9,949,845 18,547,247
Traveling, conveyance and entertainment 243,807 549,743
Prin�ng and sta�onery 211,620 484,419
Electricity, water and gas 3,385,822 1,570,638 Communica�on 622,385 808,314 Vehicles running and maintenance 1,331,893 3,021,423 Legal and professional 1,522,481 5,725,699 Auditor's remunera�on 28.2 850,000 850,000 Fee and subscrip�on 325,580 3,613,808 Rent rates and taxes 2,640,000 2,640,000 Insurance 243,765 1,185,159 Repair and maintenance - 95,608 Deprecia�on 17.1.4 1,628,817 2,631,443 Others 2,355,434 1,416,236
27,470,640
51,539,070
28.1
Note 2019 2018
Rupees Rupees
28.2 Auditor's remunera�on
Annual statutory audit 682,500
682,500
Limited scope review 105,000
105,000 Review report under Code of Corporate Governance 52,500
52,500
Out of pocket expenses 10,000
10,000
850,000
850,000
These include charge in respect of employees re�rement benefits amoun�ng to Rs. nil (2018: Rs. 3,081,371).
These include charge in respect of employees re�rement benefits amoun�ng to Rs. nil (2018: Rs. 2,267,277).
These include charge in respect of employees re�rement benefits amoun�ng to Rs. nil (2018: Rs. 11,724,485).
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
47
29 OTHER INCOME
30 FINANCE COST
31 OTHER CHARGES
32 PROVISION FOR TAXATION
33 LOSS PER SHARE
33.1 Assessments for the tax years up to 2018 are deemed assessments in terms of Sec�on 120 (1) of the Ordinance, as per returns filled by the
Company.
32.1 Provision for current tax has been made under Sec�on 113 (2018: Sec�on 113) of the Income Tax Ordinance, 2001 ['the Ordinance']. There is no
rela�onship between agreegate tax expense and accoun�ng profit. Accordingly no numeriacal reconcilia�on has been presented.
Note 2019 2018
Rupees Rupees
Gain on financial instruments
Return on bank deposits 50
81,851
Other income
Gain on disposal of opera�ng fixed assets 17.1.3 4,751,123
554,871
Scrap sale 4,500,000
1,894,510
9,251,123
2,449,381
9,251,173
2,531,232
Interest/markup/profit on borrowings:
long term finances 36,009,427 28,692,014
short term borrowings 81,444,031 53,415,719
Bank charges and commission 130,029 949,431
117,583,487 83,057,164
Dona�ons 31,031 894,000
Others - 156,410
31,031 1,050,410
Current taxa�on
current year 32.1 1,396,808 23,363,082 prior year - 32,137
1,396,808 23,395,219 Deferred taxa�on
changes a�ributable to origina�on and reversal of temporary differences 12 (14,199,258) 3,192,058 changes a�ributable to changes in tax rates - (1,426,483)
(14,199,258) 1,765,575
(12,802,450) 25,160,794
Loss a�ributable to ordinary shareholders Rupees (315,777,112)
(397,941,345)
Weighted average number of ordinary shares outstanding during the year No. of shares 8,775,000
8,775,000
Loss per share - Basic Rupees (35.99)
(45.35)
There is no an�-dilu�ve effect on the basic loss per share of the Company.
Unit 2019 2018
46
26.2
Note 2019 2018
Rupees Rupees
27 SELLING AND DISTRIBUTION EXPENSES
Salaries wages and benefits 27.1 573,285
5,765,146
Inland transporta�on 965,463
1,050,668
Ocean freight and forwarding 920
5,106
Traveling -
33,320
Communica�on 9,100
107,610
Insurance 23,838
95,356
Commission 171,112
1,909,085
Vehicle running and maintenance 4,050 394,590
Others - 29,890
1,747,768 9,390,771
27.1
Note 2019 2018
Rupees Rupees
28 ADMINISTRATIVE AND GENERAL EXPENSES
Directors' remunera�on 2,159,191 8,399,333
Salaries and benefits 28.1 9,949,845 18,547,247
Traveling, conveyance and entertainment 243,807 549,743
Prin�ng and sta�onery 211,620 484,419
Electricity, water and gas 3,385,822 1,570,638 Communica�on 622,385 808,314 Vehicles running and maintenance 1,331,893 3,021,423 Legal and professional 1,522,481 5,725,699 Auditor's remunera�on 28.2 850,000 850,000 Fee and subscrip�on 325,580 3,613,808 Rent rates and taxes 2,640,000 2,640,000 Insurance 243,765 1,185,159 Repair and maintenance - 95,608 Deprecia�on 17.1.4 1,628,817 2,631,443 Others 2,355,434 1,416,236
27,470,640
51,539,070
28.1
Note 2019 2018
Rupees Rupees
28.2 Auditor's remunera�on
Annual statutory audit 682,500
682,500
Limited scope review 105,000
105,000 Review report under Code of Corporate Governance 52,500
52,500
Out of pocket expenses 10,000
10,000
850,000
850,000
These include charge in respect of employees re�rement benefits amoun�ng to Rs. nil (2018: Rs. 3,081,371).
These include charge in respect of employees re�rement benefits amoun�ng to Rs. nil (2018: Rs. 2,267,277).
These include charge in respect of employees re�rement benefits amoun�ng to Rs. nil (2018: Rs. 11,724,485).
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
47
29 OTHER INCOME
30 FINANCE COST
31 OTHER CHARGES
32 PROVISION FOR TAXATION
33 LOSS PER SHARE
33.1 Assessments for the tax years up to 2018 are deemed assessments in terms of Sec�on 120 (1) of the Ordinance, as per returns filled by the
Company.
32.1 Provision for current tax has been made under Sec�on 113 (2018: Sec�on 113) of the Income Tax Ordinance, 2001 ['the Ordinance']. There is no
rela�onship between agreegate tax expense and accoun�ng profit. Accordingly no numeriacal reconcilia�on has been presented.
Note 2019 2018
Rupees Rupees
Gain on financial instruments
Return on bank deposits 50
81,851
Other income
Gain on disposal of opera�ng fixed assets 17.1.3 4,751,123
554,871
Scrap sale 4,500,000
1,894,510
9,251,123
2,449,381
9,251,173
2,531,232
Interest/markup/profit on borrowings:
long term finances 36,009,427 28,692,014
short term borrowings 81,444,031 53,415,719
Bank charges and commission 130,029 949,431
117,583,487 83,057,164
Dona�ons 31,031 894,000
Others - 156,410
31,031 1,050,410
Current taxa�on
current year 32.1 1,396,808 23,363,082 prior year - 32,137
1,396,808 23,395,219 Deferred taxa�on
changes a�ributable to origina�on and reversal of temporary differences 12 (14,199,258) 3,192,058 changes a�ributable to changes in tax rates - (1,426,483)
(14,199,258) 1,765,575
(12,802,450) 25,160,794
Loss a�ributable to ordinary shareholders Rupees (315,777,112)
(397,941,345)
Weighted average number of ordinary shares outstanding during the year No. of shares 8,775,000
8,775,000
Loss per share - Basic Rupees (35.99)
(45.35)
There is no an�-dilu�ve effect on the basic loss per share of the Company.
Unit 2019 2018
48
Note 2019 2018
Rupees Rupees
34 CASH USED IN OPERATIONS
Loss before taxa�on (328,579,562)
(372,780,551)
Adjustments for non-cash and other items
Interest/markup/profit on borrowings 117,453,458
82,107,733
No�onal interest 36,015,720
(12,182,900)
Gain on disposal of opera�ng fixed assets (4,751,123)
(554,871)
Provision for employees re�rement benefits -
17,073,133
Deprecia�on 41,356,207
44,325,475
190,074,262
130,768,570
Opera�ng loss before changes in working capital (138,505,300) (242,011,981)
Changes in working capital
Stores, spares and loose tools 100,531 3,905,153
Stock in trade 35,006,972 391,773,502
Trade debts 3,470,948 (14,874,955)
Advances, prepayments and other receivables (5,259,198) 3,581,448
Trade and other payables 53,258,106 (191,393,895)
86,577,359 192,991,253
Cash used in opera�ons (51,927,941) (49,020,728)
35 CASH AND CASH EQUIVALENTS
Cash and bank balances 24 2,501,841 2,221,944
2,501,841 2,221,944
36 TRANSACTIONS AND BALANCES WITH RELATED PARTIES
Name of related party Nature of rela�onship Basis of rela�onship
Chief execu�ve officer 17.59%
Director 18.38%
Director 17.71%
Director 17.59%
Director 0.08%
Director 0.03%
Director 0.03%
Transac�ons with sponsors are limited to provision of interest free loans to the Company and rental payments for office premises used by the
Company. Details of transac�ons and balances with related par�es is as follows:
Related par�es from the Company's perspec�ve comprise key management personnel and sponsors of the Company. Key management personnel
are those persons having authority and responsibility for planning, direc�ng and controlling the ac�vi�es of the Company, directly or indirectly, and
includes the Chief Execu�ve and Directors of the Company. The details of Company's related par�es, with whom the Company had transac�ons
during the year or has balances outstanding as at the repor�ng date are as follows:
Key management personnel
Key management personnel
Aggregate %age of
shareholding in
the Company
Mian Iqbal Salahuddin
Ms. Munira Salahuddin
Mian Yousaf Salahuddin
Mian Asad Salahuddin Key management personnel
Key management personnel
Key management personnel
Key management personnel
Mian Sohail Salahuddin Key management personnel
Sheikh Abdul Salam
Syed Abid Raza Zaidi
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
49
2019 2018
Rupees Rupees
36.1 Transac�ons with related par�es
Nature of rela�onship Nature of transac�ons
Key management personnel Short term employee benefits 2,159,191
9,612,882
Sponsors Long term loan obtained 45,000,000
140,419,383
Short term borrowing obtained/(repaid) (984,353) -
Rent paid 2,640,000 2,640,000
Balances with related par�es
Nature of rela�onship Nature of balances
Key management personnel Short term employee benefits payable - 535,000
Sponsors Long term loan 795,000,000 750,000,000
Short term borrowings 120,980 1,105,333
37 FINANCIAL INSTRUMENTS
The carrying amounts of the Company's financial instruments by class and category are as follows:
Note 2019 2018
Rupees Rupees
Financial assets
Cash in hand 24 28,802 79,017
Financial assets at amor�zed cost
Long term deposits 18 11,243,604 11,243,604 Trade debts 21 96,582,970 100,053,918 Advances to employees 22 12,837,167 6,037,793 Security deposits 22 1,613,107 1,613,107 Insurance claims receivable 22 1,922,460 1,922,460 Bank balances 24 2,501,841 2,221,944
126,729,951 123,171,843
Financial liabili�es
Financial liabili�es at amor�zed cost
Loan from sponsors 9 617,898,653 536,882,933 Long term finances 10 83,333,334 83,333,334 Short term borrowings 14 722,537,650 722,537,650 Accrued interest/markup/profit 15 181,557,822 64,104,364 Trade creditors 13 138,945,062
138,665,368
Accrued liabili�es 13 185,222,580
116,369,756
Unclaimed dividend 1,010,033
1,010,033
1,930,505,134
1,662,903,438
38 FINANCIAL RISK EXPOSURE AND MANAGEMENT
The Company’s ac�vi�es expose it to a variety of financial risks: credit risk, liquidity risk and market risk. These risks affect revenues, expenses and
assets and liabili�es of the Company.
48
Note 2019 2018
Rupees Rupees
34 CASH USED IN OPERATIONS
Loss before taxa�on (328,579,562)
(372,780,551)
Adjustments for non-cash and other items
Interest/markup/profit on borrowings 117,453,458
82,107,733
No�onal interest 36,015,720
(12,182,900)
Gain on disposal of opera�ng fixed assets (4,751,123)
(554,871)
Provision for employees re�rement benefits -
17,073,133
Deprecia�on 41,356,207
44,325,475
190,074,262
130,768,570
Opera�ng loss before changes in working capital (138,505,300) (242,011,981)
Changes in working capital
Stores, spares and loose tools 100,531 3,905,153
Stock in trade 35,006,972 391,773,502
Trade debts 3,470,948 (14,874,955)
Advances, prepayments and other receivables (5,259,198) 3,581,448
Trade and other payables 53,258,106 (191,393,895)
86,577,359 192,991,253
Cash used in opera�ons (51,927,941) (49,020,728)
35 CASH AND CASH EQUIVALENTS
Cash and bank balances 24 2,501,841 2,221,944
2,501,841 2,221,944
36 TRANSACTIONS AND BALANCES WITH RELATED PARTIES
Name of related party Nature of rela�onship Basis of rela�onship
Chief execu�ve officer 17.59%
Director 18.38%
Director 17.71%
Director 17.59%
Director 0.08%
Director 0.03%
Director 0.03%
Transac�ons with sponsors are limited to provision of interest free loans to the Company and rental payments for office premises used by the
Company. Details of transac�ons and balances with related par�es is as follows:
Related par�es from the Company's perspec�ve comprise key management personnel and sponsors of the Company. Key management personnel
are those persons having authority and responsibility for planning, direc�ng and controlling the ac�vi�es of the Company, directly or indirectly, and
includes the Chief Execu�ve and Directors of the Company. The details of Company's related par�es, with whom the Company had transac�ons
during the year or has balances outstanding as at the repor�ng date are as follows:
Key management personnel
Key management personnel
Aggregate %age of
shareholding in
the Company
Mian Iqbal Salahuddin
Ms. Munira Salahuddin
Mian Yousaf Salahuddin
Mian Asad Salahuddin Key management personnel
Key management personnel
Key management personnel
Key management personnel
Mian Sohail Salahuddin Key management personnel
Sheikh Abdul Salam
Syed Abid Raza Zaidi
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
49
2019 2018
Rupees Rupees
36.1 Transac�ons with related par�es
Nature of rela�onship Nature of transac�ons
Key management personnel Short term employee benefits 2,159,191
9,612,882
Sponsors Long term loan obtained 45,000,000
140,419,383
Short term borrowing obtained/(repaid) (984,353) -
Rent paid 2,640,000 2,640,000
Balances with related par�es
Nature of rela�onship Nature of balances
Key management personnel Short term employee benefits payable - 535,000
Sponsors Long term loan 795,000,000 750,000,000
Short term borrowings 120,980 1,105,333
37 FINANCIAL INSTRUMENTS
The carrying amounts of the Company's financial instruments by class and category are as follows:
Note 2019 2018
Rupees Rupees
Financial assets
Cash in hand 24 28,802 79,017
Financial assets at amor�zed cost
Long term deposits 18 11,243,604 11,243,604 Trade debts 21 96,582,970 100,053,918 Advances to employees 22 12,837,167 6,037,793 Security deposits 22 1,613,107 1,613,107 Insurance claims receivable 22 1,922,460 1,922,460 Bank balances 24 2,501,841 2,221,944
126,729,951 123,171,843
Financial liabili�es
Financial liabili�es at amor�zed cost
Loan from sponsors 9 617,898,653 536,882,933 Long term finances 10 83,333,334 83,333,334 Short term borrowings 14 722,537,650 722,537,650 Accrued interest/markup/profit 15 181,557,822 64,104,364 Trade creditors 13 138,945,062
138,665,368
Accrued liabili�es 13 185,222,580
116,369,756
Unclaimed dividend 1,010,033
1,010,033
1,930,505,134
1,662,903,438
38 FINANCIAL RISK EXPOSURE AND MANAGEMENT
The Company’s ac�vi�es expose it to a variety of financial risks: credit risk, liquidity risk and market risk. These risks affect revenues, expenses and
assets and liabili�es of the Company.
50
The Board of Directors has the overall responsibility for establishment and oversight of risk management framework. The Board of Directors has developed a risk policy that sets out fundamentals of risk management framework. The risk policy focuses on unpredictability of financial markets, the Company’s exposure to risk of adverse effects thereof and objec�ves, policies and processes for measuring and managing such risks. The management team of the Company is responsible for administering and monitoring the financial and opera�onal financial risk management throughout the Company in accordance with the risk management framework.
The Company’s exposure to financial risks, the way these risks affect the financial posi�on and performance, and forecast transac�ons of the Company and the manner in which such risks are managed is as follows:
38.1 Credit risk
Credit risk is the risk of financial loss to the Company, if the counterparty to a financial instrument fails to meet its obliga�ons.
38.1.1 Credit risk management prac�ces
In order to minimise credit risk, the Company has adopted a policy of only dealing with creditworthty counterpar�es and limi�ng significant exposure to any single counterparty. The Company only transacts with counterpar�es that have reasonably high external credit ra�ngs. Where an external ra�ng is not available, the Company uses an internal credit risk grading mechanism. Par�cularly for customers, a dedicated team responsible for the determina�on of credit limits uses a credit scoring system to assess the poten�al as well as exis�ng customers' credit quality and assigns or updates credit limits accordingly. The ageing profile of trade debts and individually significant balances, along with collec�on ac�vi�es are reviewed on a regular basis. High risk customers are iden�fied and restric�ons are placed on future trading, including suspending future shipments and administering dispatches on a prepayment basis.
The Company reviews the recoverable amount of each financial asset on an individual basis at each repor�ng date to ensure that adequate loss allowance is made in accordnace with the assessment of credit risk for each financial asset.
The Company considers a financial asset to have low credit risk when the asset has reasonably high external credit ra�ng or if an external ra�ng is not available, the asset has an internal ra�ng of ‘performing’. Performing means that the counterparty has no past due amounts or otherwise there is no significant increase in credit risk if the amounts are past due in the normal course of business based on history with the counterparty.
In assessing whether the credit risk on a financial asset has increased significantly since ini�al recogni�on, the Company compares the risk of a default occurring on the financial asset at the repor�ng date with the risk of a default occurring on the financial asset at the date of ini�al recogni�on. In making this assessment, the Company considers both quan�ta�ve and qualita�ve informa�on that is reasonable and supportable, including historical experience and forward?looking informa�on that is available without undue cost or effort. Irrespec�ve of the outcome of the above assessment, the Company presumes that the credit risk on a financial asset has increased significantly since ini�al recogni�on when contractual payments are more than 30 days past due, unless the Company has reasonable and supportable informa�on that demonstrates otherwise. This is usually the case with various customers of the Company where the Company has long standing business rela�onship with these customers and any amounts that are past due by more than 30 days in the normal course of business are considered 'performing' based on history with the customers. Therefore despite the foregoing, the Company considers some past due trade debts to have low credit risk where the customer has a good history of mee�ng its contractual cash flow obliga�ons and is expected to maintain the same in future.
The Company regularly monitors the effec�veness of the criteria used to iden�fy whether there has been a significant increase in credit risk and revises them as appropriate to ensure that the criteria are capable of iden�fying significant increase in credit risk.
The Company considers 'default' to have occurred when the financial asset is credit-impaired. A financial asset is ocnsidered to be credit?impaired when one or more events that have a detrimental impact on the es�mated future cash flows of that financial asset have occurred.
The Company writes off a financial asset when there is informa�on indica�ng that the counter-party is in severe financial condi�on and there is no realis�c prospect of recovery.
The Company's credit risk grading framework comprises the following categories:
Category Descrip�on Basis for recognizing ECL
Performing The counterparty has low credit risk Trade debts: Li�ime ECL
Other assets: Twelve month ECL
Doub�ul Credit risk has increased significantly since ini�al recogni�on Life�me ECL
In default There is evidence indica�ng the assets is credit-impaired Life�me ECL
Write-off There is no realis�c prospect of recovery Amount is wri�en-off
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
51
38.1.2 Maximum exposure to credit risk
Note 2019 2018
Rupees Rupees
Long term deposits 18 11,243,604 11,243,604
Trade debts 21 96,582,970 100,053,918
Advances to employees 22 622,385 808,314
Security deposits 22 1,613,107 1,613,107
Insurance claims receivable 22 1,922,460 1,922,460
Bank balances 24 2,473,039 2,142,927
114,457,565 117,784,330
38.1.3 Credit quality and impairment
External credit Internal credit 12-month or Gross carrying Loss
Note ra�ng risk grading life-�me ECL amount allowance
Long term deposits 18 N/A Performing 12-month ECL 11,243,604 -
Trade debts 21 N/A Performing 12-month ECL 96,582,970 -
Advances to employees 22 N/A Performing Life�me ECL 622,385 -
Security deposits 22 N/A Performing Life�me ECL 1,613,107 -
Insurance claims receivable 22 N/A Performing Life�me ECL 1,922,460 -
Bank balances 24 A1 - A1+ N/A 12-month ECL 2,473,039 -
114,457,565 -
(a) Long term deposits
(b) Trade debts
2019 2018
Gross Gross
carrying amount carrying amount
Rupees Rupees
Neither past due nor impaired 24,280,171
24,280,171
Past due by 0 to 6 months 43,243,682
46,714,630 Past due by 6 to 12 months 16,486,187
16,486,187
Past due by over one year 12,572,930
12,572,930
96,582,970
100,053,918
(c) Advanes to employees
The maximum exposure to credit risk as at the repor�ng date is as follows:
For trade debts, the Company has applied the simplified approach in IFRS 9 to measure the loss allowance at life�me ECL. The Company
determines the expected credit losses on trade debts by using internal credit risk gradings. As at the repor�ng date, all trade debts are
considered 'performing' including those past due amoun�ng to Rs. 72.3 million as there is no significant increase in credit risk in respect of
these debts since ini�al recogni�on. The ageing analysis of trade debts as at the repor�ng date is as follows:
Advances to employees have been given against future salaries and post-employment benefits. Accordingly, these are considered to have
no credit risk.
Credit quality of financial assets is assessed by reference to external credit ra�ngs, where available, or to internal credit risk grading. The credit
quality of the Company’s financial assets exposed to credit risk is as follows:
Long term deposits comprise security deposits placed with various u�lity companies and regulatory authori�es. These deposits are
substan�ally perpetual in nature. Therefore, no credit risk has been associated with these financial assets and acordingly no loss allownace
has been made.
50
The Board of Directors has the overall responsibility for establishment and oversight of risk management framework. The Board of Directors has developed a risk policy that sets out fundamentals of risk management framework. The risk policy focuses on unpredictability of financial markets, the Company’s exposure to risk of adverse effects thereof and objec�ves, policies and processes for measuring and managing such risks. The management team of the Company is responsible for administering and monitoring the financial and opera�onal financial risk management throughout the Company in accordance with the risk management framework.
The Company’s exposure to financial risks, the way these risks affect the financial posi�on and performance, and forecast transac�ons of the Company and the manner in which such risks are managed is as follows:
38.1 Credit risk
Credit risk is the risk of financial loss to the Company, if the counterparty to a financial instrument fails to meet its obliga�ons.
38.1.1 Credit risk management prac�ces
In order to minimise credit risk, the Company has adopted a policy of only dealing with creditworthty counterpar�es and limi�ng significant exposure to any single counterparty. The Company only transacts with counterpar�es that have reasonably high external credit ra�ngs. Where an external ra�ng is not available, the Company uses an internal credit risk grading mechanism. Par�cularly for customers, a dedicated team responsible for the determina�on of credit limits uses a credit scoring system to assess the poten�al as well as exis�ng customers' credit quality and assigns or updates credit limits accordingly. The ageing profile of trade debts and individually significant balances, along with collec�on ac�vi�es are reviewed on a regular basis. High risk customers are iden�fied and restric�ons are placed on future trading, including suspending future shipments and administering dispatches on a prepayment basis.
The Company reviews the recoverable amount of each financial asset on an individual basis at each repor�ng date to ensure that adequate loss allowance is made in accordnace with the assessment of credit risk for each financial asset.
The Company considers a financial asset to have low credit risk when the asset has reasonably high external credit ra�ng or if an external ra�ng is not available, the asset has an internal ra�ng of ‘performing’. Performing means that the counterparty has no past due amounts or otherwise there is no significant increase in credit risk if the amounts are past due in the normal course of business based on history with the counterparty.
In assessing whether the credit risk on a financial asset has increased significantly since ini�al recogni�on, the Company compares the risk of a default occurring on the financial asset at the repor�ng date with the risk of a default occurring on the financial asset at the date of ini�al recogni�on. In making this assessment, the Company considers both quan�ta�ve and qualita�ve informa�on that is reasonable and supportable, including historical experience and forward?looking informa�on that is available without undue cost or effort. Irrespec�ve of the outcome of the above assessment, the Company presumes that the credit risk on a financial asset has increased significantly since ini�al recogni�on when contractual payments are more than 30 days past due, unless the Company has reasonable and supportable informa�on that demonstrates otherwise. This is usually the case with various customers of the Company where the Company has long standing business rela�onship with these customers and any amounts that are past due by more than 30 days in the normal course of business are considered 'performing' based on history with the customers. Therefore despite the foregoing, the Company considers some past due trade debts to have low credit risk where the customer has a good history of mee�ng its contractual cash flow obliga�ons and is expected to maintain the same in future.
The Company regularly monitors the effec�veness of the criteria used to iden�fy whether there has been a significant increase in credit risk and revises them as appropriate to ensure that the criteria are capable of iden�fying significant increase in credit risk.
The Company considers 'default' to have occurred when the financial asset is credit-impaired. A financial asset is ocnsidered to be credit?impaired when one or more events that have a detrimental impact on the es�mated future cash flows of that financial asset have occurred.
The Company writes off a financial asset when there is informa�on indica�ng that the counter-party is in severe financial condi�on and there is no realis�c prospect of recovery.
The Company's credit risk grading framework comprises the following categories:
Category Descrip�on Basis for recognizing ECL
Performing The counterparty has low credit risk Trade debts: Li�ime ECL
Other assets: Twelve month ECL
Doub�ul Credit risk has increased significantly since ini�al recogni�on Life�me ECL
In default There is evidence indica�ng the assets is credit-impaired Life�me ECL
Write-off There is no realis�c prospect of recovery Amount is wri�en-off
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
51
38.1.2 Maximum exposure to credit risk
Note 2019 2018
Rupees Rupees
Long term deposits 18 11,243,604 11,243,604
Trade debts 21 96,582,970 100,053,918
Advances to employees 22 622,385 808,314
Security deposits 22 1,613,107 1,613,107
Insurance claims receivable 22 1,922,460 1,922,460
Bank balances 24 2,473,039 2,142,927
114,457,565 117,784,330
38.1.3 Credit quality and impairment
External credit Internal credit 12-month or Gross carrying Loss
Note ra�ng risk grading life-�me ECL amount allowance
Long term deposits 18 N/A Performing 12-month ECL 11,243,604 -
Trade debts 21 N/A Performing 12-month ECL 96,582,970 -
Advances to employees 22 N/A Performing Life�me ECL 622,385 -
Security deposits 22 N/A Performing Life�me ECL 1,613,107 -
Insurance claims receivable 22 N/A Performing Life�me ECL 1,922,460 -
Bank balances 24 A1 - A1+ N/A 12-month ECL 2,473,039 -
114,457,565 -
(a) Long term deposits
(b) Trade debts
2019 2018
Gross Gross
carrying amount carrying amount
Rupees Rupees
Neither past due nor impaired 24,280,171
24,280,171
Past due by 0 to 6 months 43,243,682
46,714,630 Past due by 6 to 12 months 16,486,187
16,486,187
Past due by over one year 12,572,930
12,572,930
96,582,970
100,053,918
(c) Advanes to employees
The maximum exposure to credit risk as at the repor�ng date is as follows:
For trade debts, the Company has applied the simplified approach in IFRS 9 to measure the loss allowance at life�me ECL. The Company
determines the expected credit losses on trade debts by using internal credit risk gradings. As at the repor�ng date, all trade debts are
considered 'performing' including those past due amoun�ng to Rs. 72.3 million as there is no significant increase in credit risk in respect of
these debts since ini�al recogni�on. The ageing analysis of trade debts as at the repor�ng date is as follows:
Advances to employees have been given against future salaries and post-employment benefits. Accordingly, these are considered to have
no credit risk.
Credit quality of financial assets is assessed by reference to external credit ra�ngs, where available, or to internal credit risk grading. The credit
quality of the Company’s financial assets exposed to credit risk is as follows:
Long term deposits comprise security deposits placed with various u�lity companies and regulatory authori�es. These deposits are
substan�ally perpetual in nature. Therefore, no credit risk has been associated with these financial assets and acordingly no loss allownace
has been made.
52
38.2 Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obliga�ons as they fall due.
38.2.2 Exposure to liquidity risk
The followings is the analysis of contractual maturi�es of financial liabili�es, including interest/markup/profit payments.
Carrying Contractual One year One to More than
amount cash flows or less five years five years
Rupees Rupees Rupees Rupees Rupees
Loan from sponsors 617,898,653
795,000,000
-
795,000,000
-
Long term finances 310,833,334
336,685,305
303,388,935
33,296,370
-
Short term borrowings 722,537,650
722,537,650
722,537,650
-
- Accrued interest/markup/profit 181,557,822
181,557,822
181,557,822
-
-
Trade creditors 138,945,062
138,945,062
138,945,062
-
- Accrued liabili�es 185,222,580
185,222,580
185,222,580
-
-
2,156,995,101
2,359,948,419
1,531,652,049
828,296,370
-
38.2.1 Liquidity risk management
The Company's approach to managing liquidity risk is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabili�es
when due, under both normal and stressed condi�ons, without incurring unacceptable losses or risking damage to the Company's reputa�on. The
Company monitors cash flow requirements and produces cash flow projec�ons for the short and long term. Typically, the Company ensures that it
has sufficient cash on demand to meet expected opera�onal cash flows, including servicing of financial obliga�ons. This includes maintenance of
balance sheet liquidity ra�os, debtors and creditors concentra�on both in terms of overall funding mix and avoidance of undue reliance on large
individual customer. The Company also maintains various lines of credit with banking companies and also has con�nued financial support of its
directors and sponsors.
(d) Security Deposits
Security deposits comprise deposits placed with u�lity companies and yarn suppliers. These deposits are substan�ally perpetual in nature.
Therefore, no credit risk has been associated with these financial assets and acordingly no loss allownace has been made.
38.1.4 Concentra�ons of credit risk
There are no significant concentra�ons of credit risk, except for trade debts. The Company's two (2018: nil) significant customers account for Rs.
49.58 million (2018: Rs. nil) of trade receivables as at the repor�ng date, apart from which, exposure to any single customer does not exceed 10%
(2018: 10%) of trade debts as at the repor�ng date. These significant customers have long standing business rela�onships with the Company and
have a good payment record and accordingly non-performance by these customers is not expected.
38.1.6 Changes in impairment allowance for expected credit losses
The management does not changes any impairment allowance for expected credit losses .
38.1.5 Collateral held
The Company does not hold any collateral to secure its financial assets.
(f) Bank balances
The bankers of the Company have reasonably high credit ra�ngs as determined by various indpendent credit ra�ng agencies. Due to long
standing business rela�onships with these counterpar�es and considering their strong financial standing, management does not expect any
credit loss.
(e) Insurance claim receivables
These are claims receivable against group life, health and vehicles insurance. Management expect a full recovery against these claims.
Therefore no credit risk is associated with these balances.
2019
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
53
Carrying Contractual One year One to More than
amount cash flows or less five years five years
Rupees Rupees Rupees Rupees Rupees
Loan from sponsors 536,882,933
750,000,000
-
750,000,000
-
Long term finances 310,833,334
342,204,340
205,540,524
136,663,816
-
Short term borrowings 722,537,650
723,975,043
723,975,043
-
-
Accrued interest/markup/profit 64,104,364
64,104,364
64,104,364
-
-
Trade creditors 138,665,368
138,665,368
138,665,368
-
-
Accrued liabili�es 116,369,756
116,369,756
116,369,756
-
-
1,889,393,405
2,135,318,871
1,248,655,055
886,663,816
-
38.2.4 Overdue financial liabili�es
Principal interest/markup Total
Rupees Rupees Rupees
Long term finances 175,000,000 25,631,126 200,631,126
Short term borrowings 722,537,650 58,184,335 780,721,985
897,537,650 83,815,461 981,353,111
38.3 Market risk
38.3.1 Currency risk
38.3.2 Interest rate risk
(a) Interest rate risk management
(b) Interest/markup/profit bearing financial instruments
The Company manages interest rate risk by analysing its interest rate exposure on a dynamic basis. Cash flow interest rate risk is managed
by simula�ng various scenarios taking into considera�on refinancing, renewal of exis�ng posi�ons and alterna�ve financing. Based on these
scenarios, the Company calculates impact on profit a�er taxa�on and equity of defined interest rate shi�, mostly 100 basis points.
2018
The Company is facing a temporary liquidity shor�all as a result of which it was unable to meet its obliga�ons in respect of various debt finances.
The details are as follows:
Currency risk is the risk that fair values or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.
Currency risk arises from sales, purchases and resul�ng balances that are denominated in a currency other than func�onal currency. The Company
is not currently exposed to currency risk as at the repor�ng date.
2019
The management of the Company is in the process of nego�a�ons with the lenders regarding rescheduling/restructuring of overdue debts finances
Interest rate risk is the risk that fair values or future cash flows of a financial instrument will fluctuate because of changes in interest rates.
The effec�ve interest/markup/profit rates for interest/markup bearing financial instruments are men�oned in relevant notes to the
financial statements. The Company's interest/markup bearing financial instruments as at the repor�ng date are as follows:
52
38.2 Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obliga�ons as they fall due.
38.2.2 Exposure to liquidity risk
The followings is the analysis of contractual maturi�es of financial liabili�es, including interest/markup/profit payments.
Carrying Contractual One year One to More than
amount cash flows or less five years five years
Rupees Rupees Rupees Rupees Rupees
Loan from sponsors 617,898,653
795,000,000
-
795,000,000
-
Long term finances 310,833,334
336,685,305
303,388,935
33,296,370
-
Short term borrowings 722,537,650
722,537,650
722,537,650
-
- Accrued interest/markup/profit 181,557,822
181,557,822
181,557,822
-
-
Trade creditors 138,945,062
138,945,062
138,945,062
-
- Accrued liabili�es 185,222,580
185,222,580
185,222,580
-
-
2,156,995,101
2,359,948,419
1,531,652,049
828,296,370
-
38.2.1 Liquidity risk management
The Company's approach to managing liquidity risk is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabili�es
when due, under both normal and stressed condi�ons, without incurring unacceptable losses or risking damage to the Company's reputa�on. The
Company monitors cash flow requirements and produces cash flow projec�ons for the short and long term. Typically, the Company ensures that it
has sufficient cash on demand to meet expected opera�onal cash flows, including servicing of financial obliga�ons. This includes maintenance of
balance sheet liquidity ra�os, debtors and creditors concentra�on both in terms of overall funding mix and avoidance of undue reliance on large
individual customer. The Company also maintains various lines of credit with banking companies and also has con�nued financial support of its
directors and sponsors.
(d) Security Deposits
Security deposits comprise deposits placed with u�lity companies and yarn suppliers. These deposits are substan�ally perpetual in nature.
Therefore, no credit risk has been associated with these financial assets and acordingly no loss allownace has been made.
38.1.4 Concentra�ons of credit risk
There are no significant concentra�ons of credit risk, except for trade debts. The Company's two (2018: nil) significant customers account for Rs.
49.58 million (2018: Rs. nil) of trade receivables as at the repor�ng date, apart from which, exposure to any single customer does not exceed 10%
(2018: 10%) of trade debts as at the repor�ng date. These significant customers have long standing business rela�onships with the Company and
have a good payment record and accordingly non-performance by these customers is not expected.
38.1.6 Changes in impairment allowance for expected credit losses
The management does not changes any impairment allowance for expected credit losses .
38.1.5 Collateral held
The Company does not hold any collateral to secure its financial assets.
(f) Bank balances
The bankers of the Company have reasonably high credit ra�ngs as determined by various indpendent credit ra�ng agencies. Due to long
standing business rela�onships with these counterpar�es and considering their strong financial standing, management does not expect any
credit loss.
(e) Insurance claim receivables
These are claims receivable against group life, health and vehicles insurance. Management expect a full recovery against these claims.
Therefore no credit risk is associated with these balances.
2019
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
53
Carrying Contractual One year One to More than
amount cash flows or less five years five years
Rupees Rupees Rupees Rupees Rupees
Loan from sponsors 536,882,933
750,000,000
-
750,000,000
-
Long term finances 310,833,334
342,204,340
205,540,524
136,663,816
-
Short term borrowings 722,537,650
723,975,043
723,975,043
-
-
Accrued interest/markup/profit 64,104,364
64,104,364
64,104,364
-
-
Trade creditors 138,665,368
138,665,368
138,665,368
-
-
Accrued liabili�es 116,369,756
116,369,756
116,369,756
-
-
1,889,393,405
2,135,318,871
1,248,655,055
886,663,816
-
38.2.4 Overdue financial liabili�es
Principal interest/markup Total
Rupees Rupees Rupees
Long term finances 175,000,000 25,631,126 200,631,126
Short term borrowings 722,537,650 58,184,335 780,721,985
897,537,650 83,815,461 981,353,111
38.3 Market risk
38.3.1 Currency risk
38.3.2 Interest rate risk
(a) Interest rate risk management
(b) Interest/markup/profit bearing financial instruments
The Company manages interest rate risk by analysing its interest rate exposure on a dynamic basis. Cash flow interest rate risk is managed
by simula�ng various scenarios taking into considera�on refinancing, renewal of exis�ng posi�ons and alterna�ve financing. Based on these
scenarios, the Company calculates impact on profit a�er taxa�on and equity of defined interest rate shi�, mostly 100 basis points.
2018
The Company is facing a temporary liquidity shor�all as a result of which it was unable to meet its obliga�ons in respect of various debt finances.
The details are as follows:
Currency risk is the risk that fair values or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.
Currency risk arises from sales, purchases and resul�ng balances that are denominated in a currency other than func�onal currency. The Company
is not currently exposed to currency risk as at the repor�ng date.
2019
The management of the Company is in the process of nego�a�ons with the lenders regarding rescheduling/restructuring of overdue debts finances
Interest rate risk is the risk that fair values or future cash flows of a financial instrument will fluctuate because of changes in interest rates.
The effec�ve interest/markup/profit rates for interest/markup bearing financial instruments are men�oned in relevant notes to the
financial statements. The Company's interest/markup bearing financial instruments as at the repor�ng date are as follows:
54
Fixed rate instruments
Financial assets 1,762
13,476
Financial liabili�es 617,898,653
536,882,933
Variable rate instruments
Financial assets -
-
Financial liabili�es 1,033,370,984 1,033,370,984
39 CAPITAL MANAGEMENT
40 FAIR VALUE MEASUREMENTS
40.1 Financial Instruments
The Company's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future
development of the business. Any temporary shor�all is met through interest free loans from sponsors. The Board of Directors monitors the return
on capital and level of dividends to ordinary shareholders and seeks to keep a balance between the higher return that might be possible with higher
level of borrowings and the advantages and security afforded by a sound capital posi�on. The Company monitors capital using the gearing ra�o
which is debt divided by total capital employed. Debt comprises long term finances and loan from sponsors, including current maturity. Total capital
employed includes total equity, as shown in the statement of financial posi�on, plus debt. The Company's strategy is to maintain an op�mal capital
structure in order to minimize cost of capital. Gearing ra�o of the Company as at the repor�ng date is as follows:
38.3.3 Other price risk
Othre price risk represents the risk that the fair value or future cash flows of financial instrument will fluctuate because of changes in market prices,
other than those arising from interest rate risk or currency risk, whether those changes are caused by factors specific to the individual financial
instrument or its issuer, or factors affec�ng all similar financial instruments. The Company is not exposed to price risk since the fair values of the
Company's financial instruments are not based on market prices.
(c) Fair value sensi�vity analysis for fixed rate instruments
The Company does not account for fixed rate financial assets and liabili�es at fair value through profit or loss.
40.1.1 Financial instruments measured at fair value
The Company measures some of its financial assets at fair value at the end of each repor�ng period. Fair value measurements are classified using a
fair value hierarchy that reflects the significance of the inputs used in making the measurements and has the following levels.
Level 1 Quoted prices (unadjusted) in ac�ve markets for iden�cal assets or liabili�es.
There were no changes in the Company's approach to capital management during the year. The Company is not subject to externally imposed
capital requirements, except those, related to maintenance of debt covenants, commonly imposed by the providers of debt finance.
(d) Cash flow sensi�vity analysis for variable rate instruments and cash flow hedges
An increase of 100 basis points in interest rates as at the repor�ng date would have decreased profit for the year by Rs. 10.33 million (2018:
Rs. 10.33 million). A decrease of 100 basis points wound have had an equal but opposite effect on profit for the year. The analysis assumes
that all other variables, in par�cular foreign exchange rates, remain constant and ignores the impact, if any, on provision for taxa�on for the
year.
2019 2018
Rupees Rupees
Unit 2019 2018
Total debt Rupees 928,731,987 847,716,267 Total equity Rupees (742,041,246) (426,264,134)
Total capital employed 186,690,741 421,452,133
Gearing % age 497.47% 201.14%
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
55
Level 2
Level 3
40.1.2 Financial instruments not measured at fair value
40.2 Assets and liabili�es other than financial instruments.
40.2.1 Recurring fair value measurements
Level 1 Level 2 Level 3 2019 2018
Rupees Rupees
Freehold land - 142,835,000 - 142,835,000 142,835,000
Buildings on freehold land - - 186,889,490 186,889,490 196,725,779
Plant and machinery - - 522,653,990 522,653,990 550,162,095
Electric installa�on - - 36,155,431 36,155,431 38,058,348
Laboratory equipment - - 3,388,732 3,388,732 3,765,258
Fire figh�ng equipment - - 680,400 680,400 756,000
For fair value measurements categorised into Level 2 and Level 3 the following informa�on is relevant:
Freehold land
Buildings on
freehold land
There are no recurring or non-recurring fair value measurements as at the repor�ng date. The management considers the carrying amount of all the
financial instruments to approximate their fair values.
Sensi�vity
For recurring fair value measurements, the fair value hierarchy and informa�on about how the fair values are determined is as follows:
Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).
Valua�on technique Significant inputs
The fair value hierarchy of assets measured at fair value and the informa�on about how the fair values of these financial instruments are
determined are as follows:
Cost approach that reflects
the cost to the market
par�cipants to construct
assets of comparable
u�lity and age, adjusted
for obsolescence and
deprecia�on. There was no
change in valua�on
technique during the year.
A 5% increase in es�mated construc�on
and other ancillary expenditure would
results in a significant increase in fair
value of buildings by Rs. 9.344 million
(2018: Rs. 9,836 million).
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices)
or indirectly (that is, derived from prices).
Market comparable
approach that reflects
recent transac�on prices
for similar proper�es
The management considers the carrying amount of all financial instruments not measured at fair value to approximate their carrying values.
Es�mated purchase price, including non-
refundable purchase taxes and other
costs directly a�ributable to the
acquisi�on.
A 5% increase in es�mated purchase
price, including non-refundable
purchase taxes and other costs directly
a�ributable to the acquisi�on would
result in a significant increase in fair
value of buildings by Rs. 7.142 million
(2018: Rs. 7.142 million).
Es�mated construc�on costs and other
ancillary expenditure.
54
Fixed rate instruments
Financial assets 1,762
13,476
Financial liabili�es 617,898,653
536,882,933
Variable rate instruments
Financial assets -
-
Financial liabili�es 1,033,370,984 1,033,370,984
39 CAPITAL MANAGEMENT
40 FAIR VALUE MEASUREMENTS
40.1 Financial Instruments
The Company's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future
development of the business. Any temporary shor�all is met through interest free loans from sponsors. The Board of Directors monitors the return
on capital and level of dividends to ordinary shareholders and seeks to keep a balance between the higher return that might be possible with higher
level of borrowings and the advantages and security afforded by a sound capital posi�on. The Company monitors capital using the gearing ra�o
which is debt divided by total capital employed. Debt comprises long term finances and loan from sponsors, including current maturity. Total capital
employed includes total equity, as shown in the statement of financial posi�on, plus debt. The Company's strategy is to maintain an op�mal capital
structure in order to minimize cost of capital. Gearing ra�o of the Company as at the repor�ng date is as follows:
38.3.3 Other price risk
Othre price risk represents the risk that the fair value or future cash flows of financial instrument will fluctuate because of changes in market prices,
other than those arising from interest rate risk or currency risk, whether those changes are caused by factors specific to the individual financial
instrument or its issuer, or factors affec�ng all similar financial instruments. The Company is not exposed to price risk since the fair values of the
Company's financial instruments are not based on market prices.
(c) Fair value sensi�vity analysis for fixed rate instruments
The Company does not account for fixed rate financial assets and liabili�es at fair value through profit or loss.
40.1.1 Financial instruments measured at fair value
The Company measures some of its financial assets at fair value at the end of each repor�ng period. Fair value measurements are classified using a
fair value hierarchy that reflects the significance of the inputs used in making the measurements and has the following levels.
Level 1 Quoted prices (unadjusted) in ac�ve markets for iden�cal assets or liabili�es.
There were no changes in the Company's approach to capital management during the year. The Company is not subject to externally imposed
capital requirements, except those, related to maintenance of debt covenants, commonly imposed by the providers of debt finance.
(d) Cash flow sensi�vity analysis for variable rate instruments and cash flow hedges
An increase of 100 basis points in interest rates as at the repor�ng date would have decreased profit for the year by Rs. 10.33 million (2018:
Rs. 10.33 million). A decrease of 100 basis points wound have had an equal but opposite effect on profit for the year. The analysis assumes
that all other variables, in par�cular foreign exchange rates, remain constant and ignores the impact, if any, on provision for taxa�on for the
year.
2019 2018
Rupees Rupees
Unit 2019 2018
Total debt Rupees 928,731,987 847,716,267 Total equity Rupees (742,041,246) (426,264,134)
Total capital employed 186,690,741 421,452,133
Gearing % age 497.47% 201.14%
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
55
Level 2
Level 3
40.1.2 Financial instruments not measured at fair value
40.2 Assets and liabili�es other than financial instruments.
40.2.1 Recurring fair value measurements
Level 1 Level 2 Level 3 2019 2018
Rupees Rupees
Freehold land - 142,835,000 - 142,835,000 142,835,000
Buildings on freehold land - - 186,889,490 186,889,490 196,725,779
Plant and machinery - - 522,653,990 522,653,990 550,162,095
Electric installa�on - - 36,155,431 36,155,431 38,058,348
Laboratory equipment - - 3,388,732 3,388,732 3,765,258
Fire figh�ng equipment - - 680,400 680,400 756,000
For fair value measurements categorised into Level 2 and Level 3 the following informa�on is relevant:
Freehold land
Buildings on
freehold land
There are no recurring or non-recurring fair value measurements as at the repor�ng date. The management considers the carrying amount of all the
financial instruments to approximate their fair values.
Sensi�vity
For recurring fair value measurements, the fair value hierarchy and informa�on about how the fair values are determined is as follows:
Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).
Valua�on technique Significant inputs
The fair value hierarchy of assets measured at fair value and the informa�on about how the fair values of these financial instruments are
determined are as follows:
Cost approach that reflects
the cost to the market
par�cipants to construct
assets of comparable
u�lity and age, adjusted
for obsolescence and
deprecia�on. There was no
change in valua�on
technique during the year.
A 5% increase in es�mated construc�on
and other ancillary expenditure would
results in a significant increase in fair
value of buildings by Rs. 9.344 million
(2018: Rs. 9,836 million).
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices)
or indirectly (that is, derived from prices).
Market comparable
approach that reflects
recent transac�on prices
for similar proper�es
The management considers the carrying amount of all financial instruments not measured at fair value to approximate their carrying values.
Es�mated purchase price, including non-
refundable purchase taxes and other
costs directly a�ributable to the
acquisi�on.
A 5% increase in es�mated purchase
price, including non-refundable
purchase taxes and other costs directly
a�ributable to the acquisi�on would
result in a significant increase in fair
value of buildings by Rs. 7.142 million
(2018: Rs. 7.142 million).
Es�mated construc�on costs and other
ancillary expenditure.
56
Plant and
machinery
Electric
installa�on
Laboratory
equipment
Fire figh�ng
equipment
40.2.2 Non-recurring fair value measurements
Cost approach that reflects
the cost to the market
par�cipants to acquire
assets of comparable
u�lity and age, adjusted
for obsolescence and
deprecia�on. There was no
change in valua�on
technique during the year.
Es�mated purchase price, including
import du�es and non-refundable
purchase taxes and other costs directly
a�ributable to the acquisi�on or
construc�on, erec�on and installa�on.
Cost approach that reflects
the cost to the market
par�cipants to acquire
assets of comparable
u�lity and age, adjusted
for obsolescence and
deprecia�on. There was no
change in valua�on
technique during the year.
There are no non-recurring fair value measurements as at the repor�ng date.
There were no transfers between fair value hierarchies during the year.
A 5% increase in es�mated purchase
price, including import du�es and non-
refundable purchase taxes and other
directly a�ributable costs would results
in a significant increase in fair value of
fire figh�ng equipment by Rs. 34,020
(2018: Rs. 37,800).
A 5% increase in es�mated purchase
price, including import du�es and non-
refundable purchase taxes and other
directly a�ributable costs would results
in a significant increase in fair value of
laboratory equipment by Rs. 169,437
(2018: Rs. 188,263).
Cost approach that reflects
the cost to the market
par�cipants to acquire
assets of comparable
u�lity and age, adjusted
for obsolescence and
deprecia�on. There was no
change in valua�on
technique during the year.
Es�mated purchase price, including
import du�es and non-refundable
purchase taxes and other costs directly
a�ributable to the acquisi�on or
construc�on, erec�on and installa�on.
Cost approach that reflects
the cost to the market
par�cipants to acquire
assets of comparable
u�lity and age, adjusted
for obsolescence and
deprecia�on. There was no
change in valua�on
technique during the year.
Es�mated purchase price, including
import du�es and non-refundable
purchase taxes and other costs directly
a�ributable to the acquisi�on or
construc�on, erec�on and installa�on.
Reconcilia�on of fair value measurements categorized in Level 3 is presented in note 17.1.5.
Valua�on technique Significant inputs Sensi�vity
A 5% increase in es�mated purchase
price, including import du�es and non-
refundable purchase taxes and other
directly a�ributable costs would results
in a significant increase in fair value of
electric installa�on by Rs.1.8 million
(2018: Rs. 1.9 million).
A 5% increase in es�mated purchase
price, including import du�es and non-
refundable purchase taxes and other
directly a�ributable costs would results
in a significant increase in fair value of
plant and machinery by Rs.
26.133million (2018: Rs. 27,508 million).
Es�mated purchase price, including
import du�es and non-refundable
purchase taxes and other costs directly
a�ributable to the acquisi�on or
construc�on, erec�on and installa�on.
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
57
41 RESTRICTION ON TITLE AND ASSETS PLEDGED/MORTGAGED AS SECURITY
Mortgages and charges
Charge over current assets 513,840,000 502,500,000
Charge over fixed assets 1,008,282,000 1,308,622,000
Pledge
Raw material 456,545,598 459,551,667
Finished goods 108,894,900 112,254,250
42 REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES
Addi�onally the chief execu�ve, directors and execu�ves are also provided company maintained vehicles.
43 SEGMENT INFORMATION
43.1 The Company is a single reportable segment.
43.2 All non-current assets of the Company are situated in Pakistan.
43.3 All sales of the Company have originated from Pakistan.
44 NUMBER OF EMPLOYEES
The aggregate amount charged to profit or loss in respect of chief execu�ve, directors and execu�ves on account of managerial remunera�on,
allowances and perquisites, post employment benefits and the number of such directors and execu�ves is as follows:
Remunera�on, allowances and mee�ng fee include Rs. nil (2018: Rs. 2,520,000) paid to non-execu�ve directors of the Company.
43.4 Sales include Rs. 47.841 million of revenue derived from sales to three customers. There is no other single significant external customer to whom
sales in excess of 10% of the Company's total sales were made during the year.
2019 2018
Rupees Rupees
Chief Execu�ve Directors Execu�ves
Rupees Rupees Rupees
Managerial remunera�on 795,000 1,155,000 3,000,000
Allowances and perquisites 147,810 61,381 -
Post employment benefits - - -
942,810 1,216,381 3,000,000
Number of persons 1 3 2
2019
Chief Execu�ve Directors Execu�ves
Rupees Rupees Rupees
Managerial remunera�on 3,180,000 4,620,000 4,320,000
Allowances and perquisites 697,090 1,115,792 60,000
Post employment benefits - - 360,000
3,877,090 5,735,792 4,740,000
Number of persons 1 3 3
2018
Total number of employees 8 1,078
Average number of employees 406 1,076
2019 2018
56
Plant and
machinery
Electric
installa�on
Laboratory
equipment
Fire figh�ng
equipment
40.2.2 Non-recurring fair value measurements
Cost approach that reflects
the cost to the market
par�cipants to acquire
assets of comparable
u�lity and age, adjusted
for obsolescence and
deprecia�on. There was no
change in valua�on
technique during the year.
Es�mated purchase price, including
import du�es and non-refundable
purchase taxes and other costs directly
a�ributable to the acquisi�on or
construc�on, erec�on and installa�on.
Cost approach that reflects
the cost to the market
par�cipants to acquire
assets of comparable
u�lity and age, adjusted
for obsolescence and
deprecia�on. There was no
change in valua�on
technique during the year.
There are no non-recurring fair value measurements as at the repor�ng date.
There were no transfers between fair value hierarchies during the year.
A 5% increase in es�mated purchase
price, including import du�es and non-
refundable purchase taxes and other
directly a�ributable costs would results
in a significant increase in fair value of
fire figh�ng equipment by Rs. 34,020
(2018: Rs. 37,800).
A 5% increase in es�mated purchase
price, including import du�es and non-
refundable purchase taxes and other
directly a�ributable costs would results
in a significant increase in fair value of
laboratory equipment by Rs. 169,437
(2018: Rs. 188,263).
Cost approach that reflects
the cost to the market
par�cipants to acquire
assets of comparable
u�lity and age, adjusted
for obsolescence and
deprecia�on. There was no
change in valua�on
technique during the year.
Es�mated purchase price, including
import du�es and non-refundable
purchase taxes and other costs directly
a�ributable to the acquisi�on or
construc�on, erec�on and installa�on.
Cost approach that reflects
the cost to the market
par�cipants to acquire
assets of comparable
u�lity and age, adjusted
for obsolescence and
deprecia�on. There was no
change in valua�on
technique during the year.
Es�mated purchase price, including
import du�es and non-refundable
purchase taxes and other costs directly
a�ributable to the acquisi�on or
construc�on, erec�on and installa�on.
Reconcilia�on of fair value measurements categorized in Level 3 is presented in note 17.1.5.
Valua�on technique Significant inputs Sensi�vity
A 5% increase in es�mated purchase
price, including import du�es and non-
refundable purchase taxes and other
directly a�ributable costs would results
in a significant increase in fair value of
electric installa�on by Rs.1.8 million
(2018: Rs. 1.9 million).
A 5% increase in es�mated purchase
price, including import du�es and non-
refundable purchase taxes and other
directly a�ributable costs would results
in a significant increase in fair value of
plant and machinery by Rs.
26.133million (2018: Rs. 27,508 million).
Es�mated purchase price, including
import du�es and non-refundable
purchase taxes and other costs directly
a�ributable to the acquisi�on or
construc�on, erec�on and installa�on.
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
57
41 RESTRICTION ON TITLE AND ASSETS PLEDGED/MORTGAGED AS SECURITY
Mortgages and charges
Charge over current assets 513,840,000 502,500,000
Charge over fixed assets 1,008,282,000 1,308,622,000
Pledge
Raw material 456,545,598 459,551,667
Finished goods 108,894,900 112,254,250
42 REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES
Addi�onally the chief execu�ve, directors and execu�ves are also provided company maintained vehicles.
43 SEGMENT INFORMATION
43.1 The Company is a single reportable segment.
43.2 All non-current assets of the Company are situated in Pakistan.
43.3 All sales of the Company have originated from Pakistan.
44 NUMBER OF EMPLOYEES
The aggregate amount charged to profit or loss in respect of chief execu�ve, directors and execu�ves on account of managerial remunera�on,
allowances and perquisites, post employment benefits and the number of such directors and execu�ves is as follows:
Remunera�on, allowances and mee�ng fee include Rs. nil (2018: Rs. 2,520,000) paid to non-execu�ve directors of the Company.
43.4 Sales include Rs. 47.841 million of revenue derived from sales to three customers. There is no other single significant external customer to whom
sales in excess of 10% of the Company's total sales were made during the year.
2019 2018
Rupees Rupees
Chief Execu�ve Directors Execu�ves
Rupees Rupees Rupees
Managerial remunera�on 795,000 1,155,000 3,000,000
Allowances and perquisites 147,810 61,381 -
Post employment benefits - - -
942,810 1,216,381 3,000,000
Number of persons 1 3 2
2019
Chief Execu�ve Directors Execu�ves
Rupees Rupees Rupees
Managerial remunera�on 3,180,000 4,620,000 4,320,000
Allowances and perquisites 697,090 1,115,792 60,000
Post employment benefits - - 360,000
3,877,090 5,735,792 4,740,000
Number of persons 1 3 3
2018
Total number of employees 8 1,078
Average number of employees 406 1,076
2019 2018
58
45 RECOVERABLE AMOUNTS AND IMPAIRMENT
46 PLANT CAPACITY AND ACTUAL PRODUCTION
Unit 2019 2018
Owned
Number of spindles installed No. 56,076 56,076
Plant capacity on the basis of u�liza�on converted into 40s count Kgs 8,555,000 8,555,000
Actual produc�on converted into 40s count Kgs 660,570 5,336,992
47 GENERAL
47.1 Figures have been rounded off to the nearest rupee.
47.2 Compara�ve figures have been rearranged and reclassified, where necessary, for the purpose of comparison. However, there were no significant
reclassifica�ons during the year.
As at the repor�ng date, subject to appropriateness of going concern assump�on, recoverable amounts of all assets/cash genera�ng units are equal
to or exceed their carrying amounts, unless stated otherwise in these financial statements.
It is difficult to precisely compare produc�on capacity and the resultant produc�on converted into base count in the tex�le industry since it
fluctuates widely depending on various factors such as count of yarn spun, raw materials used, spindle speed and twist etc. It would also vary
according to the pa�ern of produc�on adopted in a par�cular year. During the year, the Company has cancelled the lease of rented facility.
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
MIAN YOUSAF SALAHUDDIN
Director
MIAN IQBAL SALAHUDDIN
Chief Execu�ve
HASSAN SHAHNAWAZ
Chief Financial OfficerLahore Date : October 04, 2019
59
FORM 34
THE COMPANIES ACT, 2017
(Sec�on 227(2)(f))
PATTERN OF SHAREHOLDING
1.1 Name of the Company SALLY TEXTILE MILLS LIMITED
2.1. Pa�ern of holding of the shares held by the shareholders as at 30-06-2019
------Shareholdings------
2.2 No. of Shareholders From To Total Shares Held
937 1 100 60,640
314 101 500 83,192
76 501 1,000 64,199
112 1,001 5,000 300,490
26 5,001 10,000 210,049
13 10,001 15,000 168,694
5 15,001 20,000 89,205
2 20,001 25,000 47,000
2 25,001 30,000 55,000
3 30,001 35,000 100,841
2 35,001 40,000 77,000
1 40,001 45,000 40,500
1 45,001 50,000 47,393
3 55,001 60,000 170,100
1 75,001 80,000 76,000
1 90,001 95,000 94,000
1 125,001 130,000 129,500
1 135,001 140,000 140,000
1 215,001 220,000 218,000
1 345,001 350,000 348,279
2 1,540,001 1,545,000 3,087,640
1 1,550,001 1,555,000 1,554,328
1 1,610,001 1,615,000 1,612,950
1,507 8,775,000
58
45 RECOVERABLE AMOUNTS AND IMPAIRMENT
46 PLANT CAPACITY AND ACTUAL PRODUCTION
Unit 2019 2018
Owned
Number of spindles installed No. 56,076 56,076
Plant capacity on the basis of u�liza�on converted into 40s count Kgs 8,555,000 8,555,000
Actual produc�on converted into 40s count Kgs 660,570 5,336,992
47 GENERAL
47.1 Figures have been rounded off to the nearest rupee.
47.2 Compara�ve figures have been rearranged and reclassified, where necessary, for the purpose of comparison. However, there were no significant
reclassifica�ons during the year.
As at the repor�ng date, subject to appropriateness of going concern assump�on, recoverable amounts of all assets/cash genera�ng units are equal
to or exceed their carrying amounts, unless stated otherwise in these financial statements.
It is difficult to precisely compare produc�on capacity and the resultant produc�on converted into base count in the tex�le industry since it
fluctuates widely depending on various factors such as count of yarn spun, raw materials used, spindle speed and twist etc. It would also vary
according to the pa�ern of produc�on adopted in a par�cular year. During the year, the Company has cancelled the lease of rented facility.
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
MIAN YOUSAF SALAHUDDIN
Director
MIAN IQBAL SALAHUDDIN
Chief Execu�ve
HASSAN SHAHNAWAZ
Chief Financial OfficerLahore Date : October 04, 2019
59
FORM 34
THE COMPANIES ACT, 2017
(Sec�on 227(2)(f))
PATTERN OF SHAREHOLDING
1.1 Name of the Company SALLY TEXTILE MILLS LIMITED
2.1. Pa�ern of holding of the shares held by the shareholders as at 30-06-2019
------Shareholdings------
2.2 No. of Shareholders From To Total Shares Held
937 1 100 60,640
314 101 500 83,192
76 501 1,000 64,199
112 1,001 5,000 300,490
26 5,001 10,000 210,049
13 10,001 15,000 168,694
5 15,001 20,000 89,205
2 20,001 25,000 47,000
2 25,001 30,000 55,000
3 30,001 35,000 100,841
2 35,001 40,000 77,000
1 40,001 45,000 40,500
1 45,001 50,000 47,393
3 55,001 60,000 170,100
1 75,001 80,000 76,000
1 90,001 95,000 94,000
1 125,001 130,000 129,500
1 135,001 140,000 140,000
1 215,001 220,000 218,000
1 345,001 350,000 348,279
2 1,540,001 1,545,000 3,087,640
1 1,550,001 1,555,000 1,554,328
1 1,610,001 1,615,000 1,612,950
1,507 8,775,000
60
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
2.3 Categories of shareholders
Share held Percentage
2.3.1 Directors, Chief Execu�ve Officers, 6,262,918 71.3723
and their spouse and minor children
2.3.2 Associated Companies, - -
undertakings and related
par�es. (Parent Company)
2.3.3 NIT and ICP 362,924 4.1359
2.3.4 Banks Development 25,726 0.2932
Financial Ins�tu�ons, Non
Banking Financial Ins�tu�ons.
2.3.5 Insurance Companies 1,100 0.0125
2.3.6 Modarabas and Mutual 10,000 0.1140
Funds
2.3.7 Share holders holding 10% 6,254,918 71.2811
or more
2.3.8 General Public
a. Local 1,876,973 21.3900
b. Foreign 0 -
2.3.9 Others (to be specified)
1- Joint Stock Companies 72,901 0.8308
2- Pension Funds 31,841 0.3629
3- Foreign Companies 129,500 1.4758
4- Others 1,117 0.0127
61
Sr. No. NameNo. of Shares
HeldPercentage
Associated Companies, Undertakings and Related Par�es (Name Wise Detail): - -
Mutual Funds (Name Wise Detail) - -
Directors and their Spouse and Minor Children (Name Wise Detail):
1 MIAN IQBAL SALAHUDDIN (CDC) 1,543,820 17.5934
2 MST. MUNIRA SALAHUDDIN (CDC) 1,612,950 18.3812
3 MIAN ASAD SALAH UDDIN (CDC) 1,554,328 17.7131
4 MIAN YOUSAF SALAH UDDIN (CDC) 1,543,820 17.5934
5 MIAN SOHAIL SALAHUDDIN (CDC) 5,000 0.0570
6 MR. MUHAMMAD KHALIL LATIF (CDC) 500 0.0057
7 SYED ABID RAZA ZAIDI 2,500 0.0285
Execu�ves: - -
Public Sector Companies & Corpora�ons: - -
Banks, Development Finance Ins�tu�ons, Non Banking Finance 68,667 0.7825
Companies, Insurance Companies, Takaful, Modarabas and Pension Funds:
Shareholders holding five percent or more vo�ng intrest in the listed company (Name Wise Detail)
1 MST. MUNIRA SALAHUDDIN 1,612,950 18.3812
2 MIAN ASAD SALAHUDDIN 1,554,328 17.7131
3 MIAN IQBAL SALAHUDDIN 1,543,820 17.5934
4 MIAN YOUSAF SALAHUDDIN 1,543,820 17.5934
All trades in the shares of the listed company, carried out by its Directors, Execu�ves and their
spouses and minor children shall also be disclosed:
S.No NAME SALE PURCHASE
SALLY TEXTILE MILLS LIMITED
Categories of Shareholding required under Code of Corporate Governance (CCG)
As on June 30, 2019
60
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
2.3 Categories of shareholders
Share held Percentage
2.3.1 Directors, Chief Execu�ve Officers, 6,262,918 71.3723
and their spouse and minor children
2.3.2 Associated Companies, - -
undertakings and related
par�es. (Parent Company)
2.3.3 NIT and ICP 362,924 4.1359
2.3.4 Banks Development 25,726 0.2932
Financial Ins�tu�ons, Non
Banking Financial Ins�tu�ons.
2.3.5 Insurance Companies 1,100 0.0125
2.3.6 Modarabas and Mutual 10,000 0.1140
Funds
2.3.7 Share holders holding 10% 6,254,918 71.2811
or more
2.3.8 General Public
a. Local 1,876,973 21.3900
b. Foreign 0 -
2.3.9 Others (to be specified)
1- Joint Stock Companies 72,901 0.8308
2- Pension Funds 31,841 0.3629
3- Foreign Companies 129,500 1.4758
4- Others 1,117 0.0127
61
Sr. No. NameNo. of Shares
HeldPercentage
Associated Companies, Undertakings and Related Par�es (Name Wise Detail): - -
Mutual Funds (Name Wise Detail) - -
Directors and their Spouse and Minor Children (Name Wise Detail):
1 MIAN IQBAL SALAHUDDIN (CDC) 1,543,820 17.5934
2 MST. MUNIRA SALAHUDDIN (CDC) 1,612,950 18.3812
3 MIAN ASAD SALAH UDDIN (CDC) 1,554,328 17.7131
4 MIAN YOUSAF SALAH UDDIN (CDC) 1,543,820 17.5934
5 MIAN SOHAIL SALAHUDDIN (CDC) 5,000 0.0570
6 MR. MUHAMMAD KHALIL LATIF (CDC) 500 0.0057
7 SYED ABID RAZA ZAIDI 2,500 0.0285
Execu�ves: - -
Public Sector Companies & Corpora�ons: - -
Banks, Development Finance Ins�tu�ons, Non Banking Finance 68,667 0.7825
Companies, Insurance Companies, Takaful, Modarabas and Pension Funds:
Shareholders holding five percent or more vo�ng intrest in the listed company (Name Wise Detail)
1 MST. MUNIRA SALAHUDDIN 1,612,950 18.3812
2 MIAN ASAD SALAHUDDIN 1,554,328 17.7131
3 MIAN IQBAL SALAHUDDIN 1,543,820 17.5934
4 MIAN YOUSAF SALAHUDDIN 1,543,820 17.5934
All trades in the shares of the listed company, carried out by its Directors, Execu�ves and their
spouses and minor children shall also be disclosed:
S.No NAME SALE PURCHASE
SALLY TEXTILE MILLS LIMITED
Categories of Shareholding required under Code of Corporate Governance (CCG)
As on June 30, 2019
62
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
I/We______________________________________________________________________________________of_________________________________________________________________________________________being a member of Sally Tex�le Mills Limited, hereby appoint __________________________ ______________
__________________of __________________ another member of the company as my / our proxy to a�end &
WITNESSES 1.
Signature:________________________
Name:___________________________
Address:_________________________
Signature of
_________________________________
Shareholder
CNIC or __________________________
Passport No. _____________________
2.
Signature:________________________
Name: ___________________________
Address: _________________________
_________________________________
CNIC or __________________________
(Signature should agree with thePassport No. _____________________
Specimen signature registered
With the Company)
Revenue
Stamp
FORM OF PROXY
Sally Tex�le Mills Limited 4 - F, Gulberg II, Lahore.
51st Annual
General Mee�ng
Important
Registered folio/par�cipants_____________________
ID No. and A/c No. _______________________________________________________________________
Number of shares held:_________________________
____________________________________________
Instruments of Proxy will not be considered as valid unlessDeposited or received at the company's Head Office at 4-F, Gulberg-II, Lahore not later than 48 hours before the �me holding the mee�ng.
st thvote for me / us and on my / our behalf at the 51 Annual General mee�ng of the Company to be held Friday, 25 October 2019 at 10:00 am at Noor Mahal, 1 Rasool Park, LOS, Lahore and at any adjournment thereof.
62
Sally Tex�le Mills Limited Annual Report 2019Sally Tex�le Mills LimitedAnnual Report 2019
I/We______________________________________________________________________________________of_________________________________________________________________________________________being a member of Sally Tex�le Mills Limited, hereby appoint __________________________ ______________
__________________of __________________ another member of the company as my / our proxy to a�end &
WITNESSES 1.
Signature:________________________
Name:___________________________
Address:_________________________
Signature of
_________________________________
Shareholder
CNIC or __________________________
Passport No. _____________________
2.
Signature:________________________
Name: ___________________________
Address: _________________________
_________________________________
CNIC or __________________________
(Signature should agree with thePassport No. _____________________
Specimen signature registered
With the Company)
Revenue
Stamp
FORM OF PROXY
Sally Tex�le Mills Limited 4 - F, Gulberg II, Lahore.
51st Annual
General Mee�ng
Important
Registered folio/par�cipants_____________________
ID No. and A/c No. _______________________________________________________________________
Number of shares held:_________________________
____________________________________________
Instruments of Proxy will not be considered as valid unlessDeposited or received at the company's Head Office at 4-F, Gulberg-II, Lahore not later than 48 hours before the �me holding the mee�ng.
st thvote for me / us and on my / our behalf at the 51 Annual General mee�ng of the Company to be held Friday, 25 October 2019 at 10:00 am at Noor Mahal, 1 Rasool Park, LOS, Lahore and at any adjournment thereof.
The Company Secretary
SALLY TEXTILE MILLS LIMITED 4-F, Gulberg II, Lahore.
REGISTERED OFFICE :4 - F, Gulberg II, Lahore.Phones : 042 - 35754371, 35754372, 35754373Fax : 042 - 35754394E-mail: [email protected]